t'i'^  flat 


•o«i  'II  Nfr  ■10 
■AN  -'ISnOVHA 


AUG  S?  IV  t 


Railroad  Legislation  in  Minnesota, 
1849  to  1875. 


A  Thesis  slumittei)  to  the  P'acultv  of  the  Graduate 
School  of  the  University  of  Pennsylvania  in  Par- 
tial Fulfillment  of  th^  Requirements  for 
THE  Degree  of  Doctor  of  Philosophy. 


BY  RASMUS  S.  SABY, 
Instnu  tor  in  Political  Economy  and  Politics,  Cornell  Univer- 
sity;   Sometime   Harrison   Fellow   in   Political 
Science,  University  of  Pennsylvania. 


Published  by  the  MixVnesota  Historicai.  Society  in  \'ol 
ume  XV  of  its  Historical  Collections. 


THE  VOLKSZKITUNQ  COMPANY, 

SAINT  PAUL,  MINN. 

MAY,  1912. 


Railroad  Legislation  in  Minnesota, 

1849  to  1875. 


A  Thesis  submitted  to  the  Faculty  of  the  Graduate 
School  of  the  University  of  Pennsylvania  in  Par- 
tial Fulfillment  of  the  Requirements  for 
THE  Degree  of  Doctor  of  Philosophy. 


BY  RASMUS  S.  SABY, 

Instructor  in  Political  Economy  and  Politics,  Cornell  Univer- 
sity;   Sometime   Harrison   Fellow   in   Political 
Science,  University  of  Pennsylvania. 


Published  by  the  Minnesota  Historical  Society  in  Vol- 
ume XV  OF  ITS  Historical  Collections. 


THE   VOLKSZEITUNG   COMPANY, 

SAINT  PAUL,  MINN. 

MAY,  1912. 


0  ^ 


CONTENTS 


Chapter    I.     Territorial  Railroad  Legislation,  1849-57 ....       1 

II.     A  Comparative  Study  of  the  Territorial  Char- 
ters         10 

III.  The   Railroad   Bond   Issue   and   the   General 

Railroad  Incorporation  Law  of  1858.  ...     30 

IV.  The  Eventual  Adjustment  of  the  State  Rail- 

road Bonds    38 

V.     The  Land  Grant    Railroads,  1861-1861 19 

VI.     Aid  to  Railroads,  1861-1870 57 

VII.  Attempts  at  Railroad  Control,  1861-1870.  ...  61 

VIII.     The  Grangers   70 

IX.     The    Campaign   for   Railroad   Regulation   in 

1870 86 

X.  Restrictive  Railroad  Legislation  in  1871 95 

XL  Railroad  Legislation  in  1872  and  1873 Ill 

XII.  The  Granger  Movement  in  1873 120 

XIII.  The  Granger  Legislation  of  1874 135 

XIV.  The  Situation  in  1874  after  the  Enactment  of 

the  Granger  Laws 151 

XV.     The  Granger  Laws  repealed  and  a  Xew  Rail- 
road LaAv  enacted  in  1875 164 

XVI.     The  Significance  of  the  Granger  ^Movement .  .   176 

Bibliography    1 83 

254931 


RAILROAD  LEGISLATION   IN   MINNESOTA, 
1849  to  1875.* 


BY  RASMUS  S.  SABY. 


CHAPTER  I. 

TERRITORIAL  RAILROAD   LEGISLATION,   1849-1857. 

The  Territory  of  Minnesota  was  organized  by  an  act  of  Con- 
gress approved  March  3,  1849.  It  comprised  all  of  what  is 
now  the  state  of  Minnesota  and  the  portions  of  the  Dakotas 
east  of  the  Missouri  and  White  Earth  rivers.  The  legislative 
power  of  the  territory  was  vested  in  a  governor  and  a  legisla- 
tive assembly  consisting  of  a  Council  and  a  House  of  Repre- 
sentatives. The  laws  in  force  in  the  Territory  of  Wisconsin  at 
the  date  of  its  admission  into  the  Union  continued  valid  and 
operative  in  the  Territory  of  Minnesota  as  far  as  applicable, 
but  Avere  subject  to  change  by  legislative  enactment.  Alex- 
ander Ramsey  of  Pennsylvania  was  appointed  governor  of  the 
new  territory. 

There  were  in  1849  only  a  few  straggling  settlements  along 
the  principal  rivers.  According  to  the  territorial  census  taken 
that  year,  the  population  numbered  4,680.^  The  assessable 
property  amounted  to  only  $414,936.     The  Sioux  Indians  still 


*A  Thesis  submitted  to  the  FacuUy  of  tlie  Graduate  School  of  the 
University  of  Pennsylvania  in  Partial  Fulfillment  of  the  Requirements 
for  the  Degree  of  Doctor  of  Pliilosophy;  partly  read  at  the  monthly 
meeting  of  the  Executive  Council  of  the  Minnesota  Historical  Society, 
November  13,  1911.  Chapters  I  and  II  of  this  Thesis  were  published 
nearly  as  here  in  the  Papers  and  Proceedings  of  the  Second  Annual 
Meeting  of  the  Minnesota  Academy  of  Social  Sciences  (Volume  II,  1909, 
pages  127-166). 

After  graduation  at  the  University  of  Minnesota  in  1907,  Mr.  Saby 
took  a  further  course  of  studies  there,  later  was  Harrison  Fellow  in 
Political  Science  at  the  University  of  Pennsylvania,  and  now  is  an 
instructor  in  political  economy  and  politics  at  Cornell  University.  A 
great  part  of  his  research  on  this  subject  was  carried  forward  in  the 
Library  of  the  Minnesota  Historical  Society  and  in  the  Minnesota  State 
Library,  consulting  the  state  and  federal  reports,  legislative  journals 
and  laws,  other  books,  pamplilets,  and  files  of  newspapers,  whicli  are 
cited  in  the  footnotes  of  this  work  and  listed  in  its  Bibliography. 

1.     House  Journal   (Minn.),   1849,   ]>.   2]  4. 

1 


2  MINNESOTA    HISTORICAL    SOCIETY    COLLECTIONS. 

occupied  the  land  west  of  tlie  Mississippi,  and  Minnesota  on 
the  whole  was  ''unsettled  and  unsurveyed. "  ^ 

But  the  pioneers  had  an  un])ounded  faith  in  the  future. 
Governor  Ramsey,  in  his  first  message  to  the  legislative  assem- 
bly, said:  "No  portion  of  the  earth's  surface  perhaps  com- 
bines so  manv  favorable  features  for  the  settler  as  this  terri- 
tory.  *  *  *  T^he  immigrant  and  the  capitalist  need  but 
perceive  these  sources  of  prosperity  and  wealth  to  hasten  to 
seize  upon  them  by  settling  among  us.  *  *  *  *  it  may 
not  be  long  ere  we  may  with  trutli  be  recognized  throughout 
the  political  and  moral  world,  as  indeed  the  'polar  star'  of  the 
Republican  Galaxy."^ 

But  though  the  early  settlers  saw  visions  of  future  great- 
ness and  wealth,  their  present  condition  was  not  so  ideal.  The 
eastern  markets  on  which  they  were  largely  dependent  were 
distant  and  not  easily  accessible,  and  the  different  settlements 
were  in  poor  and  primitive  communication  with  each  other. 
There  was  but  one  mail  route  leading  into  the  territory,  on 
which  was  transmitted  a  weekly  mail  from  Prairie  du  Chien, 
Wisconsin,  during  the  season  of  navigation,  and  a  semi-monthly 
mail  from  the  same  place  during  the  winter  season.*  J\lany 
new  roads  were  needed,  and  some  of  the  existing  roads  were 
so  bad  that  at  times  many  settlers  were  prevented  from  pro- 
curing even  the  most  necessarj^  supplies."'  Nine  memorials  con- 
cerning roads  and  mail  routes  were  sent  to  Congress  in  1849,^ 
and  to  all  these  Congress  "responded  in  the  affirmative  and 
made  the  necessary  appropriations."^  The  governor  reported 
in  his  message  to  the  legislature  in  1853  that  work  was  pro- 
gressing satisfactorily  on  both  old  and  new  roads.^ 

Wagon  and  military  roads  were  necessary  and  answered 
their  purposes,  but  other  means  of  transportation  were  fully 
as  essential  to  the  growth  and  development  of  the  new  terri- 


2.  Council   .Journal    (Minn.),   1849,   p.   187. 

3.  Council  Journal,  1849,  p.  7. 

4.  Prom  Memorial   to  Congress,   Laws   of  Minn.,    1810,    p.    171. 

5.  Laws  of  Minn.,  1849,  Memorial,  p.   172. 

6.  Laws  of  Minn.,  1849,  Memorials  Nos.   1,   ;i,   4,   6,   9,    10,   11,   13,   14. 

7.  House  Journal,   1851,   p.   22. 

8.  Council   Journal,    1853,    ]>.    32. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  6 

tory.  Tlie  magnificent  river  systems  seemed  to  afford  an  ad- 
mirable means  of  connecting  the  different  parts  of  the  terri- 
tory Avith  each  other,  and  tlie  wliole  witli  the  outside  Avorld. 
Congress  had  provided  for  roads,  wliy  should  it  not  also  open 
these  natural  highways  of  commerce?  The  imj)rovement  of 
the  ''majestic  Mississippi,"  with  its  gigantic  trade  affecting 
the  interests  of  so  many  states,  seemed  logically  an  object  of 
national  magnitude  and  national  importance. 

It  Avas  urgecL  that  the  improvement  of  the  rivers  would 
expedite  the  sale  and  facilitate  the  settlement  of  the  public 
lands  through  which  they  flowed.  And  besides,  had  not  the 
federal  government  assumed  special  jurisdiction  over  all  nav- 
igable streams?^  Congress,  however,  was  not  disposed  to  un- 
dertake any  such  "internal  improvements."  Its  activity  in 
this  line  had  ceased  back  in  President  Jackson's  administra- 
tion. 

By  this  time  railroad  construction  had  made  great  progress 
in  many  of  the  older  states.  Wisconsin  territory,  of  which 
]\Iinnesota  territory  had  been  a  part,  had  incorporated  a  num- 
ber of  railroad  companies,  two  of  them  as  early  as  ]836;^°  but 
naturally,  what  later  came  to  be  Minnesota  was  not  mucli  af- 
fected either  by  the  agitation  or  b}^  the  projects  at  this  time. 

]\Iinnesota  territory  soon  saw  the  advantages  and  possi- 
bilities of  the  railroad.  Already  in  1851,  its  legislative  assem- 
bly memorialized  Congress  for  a  "liberal  donation  and  appro- 
priation" in  aid  of  railroads."  A  bill  to  incorporate  a  rail- 
road company  passed  the  house  of  this  assembly,  but  was  neg- 
atived in  the  council.^-  In  1852  an  attemi)t  was  made  to  in- 
corporate another  railroad  comi)any,  but  the  bill  failed  to  pass 
the  house  in  whicli  it  originated. ^^ 

By  1853  the  transportation  problem  assumed  a  different 
phase.  The  boasted  river  systems  were  seen  to  be  inadequate, 
even  though  they  were    extensively  improved.     They  would 


9.     House  Journal,  1851,  p.  16. 

10.  Laws   of  Wisconsin,    1836,   pp.   33   and   54. 

11.  Laws  of  Minn.,    1851,   Memorial  No.   4. 

12.  St.   Paul  and  St.   Anthony   Ry.   Co.,  H.   F.   No.   15;   House  Journal, 
1851,   pp.   127,   150. 

13.  Lake  Sup.  and  Miss.  Ry.  Co.,  H.  F.  No.  46.     House  Journal,   1852, 
P.  184. 


4  MINNESOTA    HISTORICAL   SOCIETY    COLLECTIONS. 

have  to  ])e  supplemented  by  railroads,  if  tlie  territory  were  to 
enjoy  proper  transportation  facilities.  A  railroad  would  he 
needed  to  connect  the  navifial)le  waters  of  the  ^Mississippi  and 
of  the  Ked  river  of  the  North,  and  auotlier  to  connect  the  Mis- 
sissipiii  Avitli  Lake  Superior.'^  The  ai-gunients  which  had  been 
used  to  urge  Congress  to  Iniild  roads  and  improve  rivers  were 
now  used  in  favor  of  federal  aid  in  raili-oad  construction. 
Land  grants  had  been  made  to  aid  in  tlie  construction  of  canals 
in  a  number  of  states;  but  attempts  to  secure  land  grants  for 
railroads  for  a  long  time  proved  futile,  even  though  the  trans- 
fer of  the  grant  for  the  Illinois  and  ^lichigan  canal  to  a  rail- 
road company  as  early  as  1833  might  easily  have  been  taken 
as  a  precedent.^"' 

Through  the  repeated  efforts  of  Stephen  A.  Douglas  and 
others,  the  Illinois  Central  railroad  received  a  federal  land 
grant  in  1850.  In  supporting  the  measure  ]\Ir.  Douglas  argued: 
"It  is  following  the  same  system  that  was  adopted  in  refer- 
ence to  improvements  of  a  similar  character  in  Ohio,  Indiana, 
Alabama,  "Wisconsin,  and  Illinois  in  reference  to  her  canal.  It 
is  simply  carrying  out  a  principle  which  has  been  acted  upon 
for  thirty  years,  by  which  you  cede  each  alternate  section  of 
land  and  double  the  price  of  the  alternate  sections  not  ceded, 

so  that  the  same  price  is  received  for  the  whole It 

is  an  old  practice  long  continued  by  the  government."  '"'' 

In  1853  Governor  Ramse}^  recommended  that  the  legislative 
assembly  memorialize  Congress  for  similar  grants  in  aid  of 
^Minnesota  railroads.^ ^  The  sentiment  was  strong  that  public 
lands  ought  to  be  so  managed  as  to  secure  their  speedy  settle- 
ment. Besides  getting  aid  for  their  railroads,  the  territory 
would  through  such  grants  secure  the  extinction  of  the  federal 
title  to  the  land,  which  many  considered  only  secondary  in 
importance  to  the  extinction  of  the  Indian  title.' ^  The  gov- 
ernor outlined  quite  definitely  what  soon  came  to  be  the  settled 
railroad  construction  policy  of  the  territory,  namely,  through 


14.  Me.ssag-e  of  Gov.  Ramsey,  Council  Journal,   1853,  p.   30. 

15.  4   U.   S.   Statutes.   662. 

16.  Congressional   Globe,    1850.   p.   845. 

17.  Council  Journal,   1853,   i>.   30. 

18.  Ibid.,   p.   31. 


RAILROAD  LKGIST.ATION   IN  MINNESOTA.  0 

federal  aid,  in  the  form  of  land  grants,  to  build  railroads  in 
advance  of  actual  business  needs  to  settle  the  country  and  de- 
velop its  resources.  But  the  legislative  assembly  evidently  did 
not  support  the  governor's  plan  by  acclamation.  Three  memo- 
rials to  Congress  concerning  railroads  and  railroad  grants  were 
drawn  up,  but  they  all  failed  to  pass.'^  Seven  bills  to  incor- 
porate railroad  companies  Averc  introduced  at  this  session,  of 
wiiich  five  passed  after  discussion  and  amendment.-"  Only  two 
of  these  charters  make  any  mention  of  probable  federal  or  state 
land  grants.-^ 

In  1854,  the  ^Minnesota  and  Northwestern  Railroad  Com- 
pany was  incorporated,  and  by  its  charter  any  future  federal 
land  grant  was  made  over  to  it  in  fee  simple  "without  any 
further  deed  and  action."  The  same  assembly  memorialized 
Congress  for  a  grant  of  lands.--  Congress  complied,  but  pro- 
vided that  the  land  should  not  accrue  to  any  railroad  company 
already  "constituted  or  organized."-'^  Friends  of  the  ^linne- 
sota  and  Northwestern,  however,  managed  to  get  this  provi- 
sion enrolled  as  "constituted  and  organized."-*  Since  the 
company,  though  incorporated,  was  not  yet  definitely  organ- 
ized, this  change  would  give  the  company  a  technical  claim  to 
the  land.  But  the  change  was  discovered,  and  an  investigation 
followed.  The  result  was  a  repeal  of  the  land  grant  act  about 
a  month  after  its  enactment.-''  The  right  of  Congress  to  repeal 
the  act  was  contested,  but  after  a  long  process  of  litigation  the 
repeal  was  held  valid  by  the  United  States  Supreme  Court.-" 
-  A  tremendous  spirit  of  opposition  was  aroused  on  the  char- 
tering of  this  company.  It  was  claimed  tliat  the  legislature 
had  acted  without  sufficient  consideration;  that  the  territory 
had  secured  no  "resulting  interest"  in  the  land   grant;  and 


19.  Council   Journal,    1853,   p.    29.    H.    F.   No.    1;    House   Journal,    1853, 
pp.   108   and   198;   C.   F.   Nos.   2   and   3. 

20.  See  House  Journal,  1853,  Index.     C.  F.  Nos.  2,  6,  7,  Ifi,  21,  passed; 
C.   F.  No.   11   and  H.   F.  No.   4   did   not  pas.s. 

21.  Laws  of  Minn.,   1853,  ch.   10,  sect.   18;  cli.   16,  sect.   14. 

22.  Laws   of  Minn.,    1854,    p.    159. 

23.  10  U.   S.   Stat.,   302. 

24.  Council  Journal,   1855,   App.   p.    5 

25.  10  U.  S.   Stat..   575. 

26.  Rice  vs.  Minn,  and  N.  W.  R.  R.  Co. 


6 


MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 


that,  as  there  was  no  provisiou  in  the  charter  authorizing  its 
amendment,  the  company  had  been  placed  beyond  the  reach  of 
future  legislative  action.  The  agitation  did  not  diminish  wh'en 
it  l)ecame  known  that  tlie  eastern  financier  on  whose  means 
the  company  had  mainly  depended  for  the  construction  of  the 
railroad  had  disappeared  and  "become  a  fugitive  from  the 
justice  of  the  community  he  had  basely  swindled."-'  The 
people  were  all  anxious  to  get  railroads,  for  they  appreciated 
their  vital  importance  for  the  future  developmcnit  of  the  ter- 
ritory; but  for  this  very  reason  many  were  unwilling  to  give 
private  corporations  full  control  of  these  quasi-public  agencies. 
They  wanted  to  keep  them  under  effective  public  control. 

When  an  amendment  to  the  charter  was  proposed  in  1855, 
Governor  Gorman,-®  in  a  special  message  concerning  the  Min- 
nesota and  Northwestern  railroad  company,  asserted  that  the 
purpose  of  this  amendment  was  evidently  to  cure  all  failures 
and  defalcations  of  the  company.  He  urged  the  assembly  to 
do  what  it  could  to  secure  the  repeal  of  the  charter  by  Con- 
gress.-^ On  the  other  hand,  the  assembly  received  numerous 
petitions  from  interested  districts  expressing  full  confidence  in 
the  railroad  company.'^^  The  contested  amendment  was  passed 
by  a  large  majority,'^^  and  when  it  failed  to  get  the  signature 
of  the  governor  it  was  without  difficulty  passed  over  his  veto.'^^ 
Other  amendments  to  this  charter  were  made  during  this  ses- 
sion, apparently  on  the  assumption  that  the  company  had  a 
legal  right  to  the  land  grant. 

In  his  message  to  the  legislative  assembly  the  next  year, 
1856,  the  governor  reported  that  the  Minnesota  and  North- 
western railroad  company  had  not  made  the  $150,000  guar- 
antee deposit  required  of  it,  the  amendments  to  its  charter  had 
not  been  accepted,  and  no  money  luid  been  expended  in  the 
construction  of  the  railroad.'''' 


27.  House  Journal,   1855,  App.   p.   44. 

28.  Succeeded  Gov.   Ramsey,   May   15,    185.T. 

29.  Council   Journal,   1855,  App.   p.   73. 

30.  House  Journal,   1855,  see  App. 

31.  Council   Journal,    1855,    p.    142. 

32.  House  Journal,   1855,  App.  p.   143. 

33.  Ibid.,   1855,  App.  p.   6. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  7 

Many  railroads  had  been  incorporated  since  1853,  but  none 
of  them  proved  very  active.  In  the  meantime  the  territory  was 
growing  rapidly  in  population  and  in  wealth.  By  1857  Minne- 
sota had  over  150,000  inhabitants  and  taxable  property  amount- 
ing to  nearly  $50,000,000.^*  The  need  of  railroads  was  felt 
more  keenly  than  ever.  Said  Governor  Gorman:  "I  should 
be  glad  to  see  an  outlet  by  railroad  from  our  winter  home  at 
any  sacrifice  of  individual  opinion  as  to  policy,  and  indeed  any 
other  reasonable  sacrifice,  save  the  honor  of  the  territory  and 
the  enthrallment  Of  those  who  take  our  places."  ^^ 

It  was  long  believed  that,  though  formidable  objections 
might  exist  to  granting  land  to  states  for  railroad  purposes, 
such  objections  could  not  be  raised  against  grants  to  terri- 
tories under  the  quasi-guardianship  of  the  general  govern- 
ment.••'^  But  it  was  now  realized  that  the  same  objections  ap- 
plied, and  that  a  territory  did  not  occupy  such  an  enviable 
position  after  all. 

It  was  also  of  vital  importance  to  IMinnesota  at  this  time 
that  "she  be  a  state  and  fully  represented"  at  AVashington, 
because  of  a  projected  railroad  to  the  Pacific.  The  newly 
organized  Republican  party  and  the  Democratic  party  both 
asserted  in  their  platforms  of  1856  that  it  was  the  duty  of  the 
federal  government  to  aid  such  a  road."  It  was  firmly  be- 
lieved that  the  final  location  of  this  road  would  determine 
whether  Minnesota  was  to  become  the  "wealthiest  of  states" 
or  a  "mere  feeder."^''®  The  gravity  of  the  situation  awakened 
a  sense  of  responsibility,  and  the  territory  became  eager  to 
step  out  from  the  dependent  position  and  to  assume  the  duties 
and  privileges  of  statehood. 

Minnesota  territory  had  reason  to  be  grateful  to  the  twenty- 
fourth  Congress.  The  Minnesota  enabling  act  was  passed 
February  26,  1857,^^  and  one  week  later  extensive  land  grants 

34.  Second  Annual   Report  of   the   Com.   of    Statistics  for  1860-61,   p. 
121. 

35.  House  Journal,   1855,  App.   p.   7. 

36.  Council  Journal,  1855,  p.  39. 

37.  McKee,  The  National  Convention  and   Platform   of  all   Political 
Parties    (1789-1900),   pp.   99   and   94,  resp. 

38.  House  Journal,   1857,  p.   43. 

39.  11   U.   S.   Stat.,    166. 


O  MINNESOTA    HISTORICAL   SOCIETY    COLLECTIONS. 

were  made  to  aid  the  construction  of  Minnesota  railroads.*"  A 
special  session  of  the  legislative  assembly  was  convened  to  con- 
sider these  acts.  ^Minnesota  was  now  free  to  ''organize  her 
own  institutions  in  her  own  way,"  and  the  land  grants  were 
hailed  as  inaugurating  a  ncAvera  in  the  progress  of  her  people.*^ 
The  legislative  assembly  acee|)ted  the  land  grants  in  trust 
and  granted  them  conditionally  to  four  railroad  companies, 
three  of  which  had  been  previously  incorporated.  These  haA'e 
become  known  as  the  land  grant  companies.  With  St.  Paul 
and  Minneapolis  as  a  center,  they  were  planned  primarily  to 
market  the  grain  raised  in  the  ^Mississippi  and  tributary  river 
valleys  in  jNIinnesota  and  in  the  great  Red  river  valley  in  the 
Northwest. 

1.  The  ^Minnesota  &  Pacific  Railroad  Company  was  incor- 
porated at  this  session  and  authorized  to  build  a  railroad  from 
Stillwater  by  way  of  St.  Paul,  St.  Anthony  and  Minneapolis, 
to  Breckenridge,  with  a  branch  from  St.  Anthony  to  St.  Vin- 
cent.*- 

2.  The  Transit  Railroad  Company  was  to  build  a  line  from 
Winona  by  way  of  St.  Peter  to  the  Big  Sioux  river  south  of 
the  45th  parallel  of  north  latitude.*' 

3.  The  Root  River  and  Southern  Minnesota  Railroad  Com- 
pany was  to  build  one  railroad  from  La  Crescent  via  Target 
lake  up  the  valley  of  the  Root  river  to  Rochester,  and  another 
railroad  from  St.  Paul  and  St.  Anthony,  via  IMinneapolis,  Shak- 
opee  City,  Mankato  and  other  cities,  to  the  Iowa  line  *'in  the 
direction  of  the  mouth  of  the  Big  Sioux  river."** 

4.  The  Minneapolis  and  Cedar  Valley  Railroad  Company 
was  to  build  a  railroad  from  Minneapolis  to  the  south  line  of 
Minnesota  west  of  range  sixteen.** 

In  consideration  of  the  lands  granted  and  the  charter  privi- 
leges given,  these  companies  were  to  pay  into  the  state  treas- 
ury annually  three  per  cent  of  their  gross  earnings  in  lieu  of 
all  other  taxes,  and  their  lands  were  to  be  exempt  from  taxa- 
tion till  sold  or  conveyed. 

40^  11  U.   S.   Stat.,   195. 

41.  Council   Journal,    1857,   Ex.   Ses.sion,    p.    6. 

42.  I..aws   of  Minnesota,   1857,   Extra  Session,   i>.   4. 
4.^.  Ibid.,   p.   16. 

44.     II)i(l.,   i)p.   18   and   20. 


RAILROAD  I.F.GTSLATION  IN  MINNESOTA.  \) 

The  constitutioiinl  eonvontion  met  m  St.  I'aul  the  second 
^Fonday  in  July,  as  provided  for  in  the  enal)]ing  aet  *"'  and 
according  to  an  act  ])assed  by  tlie  territorial  legislature  in  its 
special  session.^*'  To  be  more  exact,  two  conventions  met,  for 
the  Republican  and  the  Democratic  delegates  met  separately. 
Owing  to  irregularities  at  the  election,  there  v;ere  many  dis- 
puted seats  and  both  i)arties  ])lanned  to  capture  the  oi-ganiza- 
tion  of  the  convention.  As  a  result  both  factions  organized 
independently.  Neither  recognized  the  existence  of  the  other, 
and  the  two  are  reported  separately.*^  But  unofficially  they 
compared  notes  as  they  proceeded,  and  finally,  through  ap- 
pointed conferees,  they  agreed  on  the  same  constitution,  word 
for  word.*^  The  constitution,  emanating  as  it  did  from  both 
conventions  and  duly  signed  and  certified  by  each,  was  ratified 
almost  unanimously  by  the  people. 

The  main  provisions  of  the  constitution  limiting  the  powers 
of  the  legislature  in  its  relations  with  private  corporations  are 
the  following :  First,  for  the  purpose  of  defraying  extraor- 
dinary expenses  the  state  may  contract  public  debts  not  ex- 
ceeding $250,000,  except  by  a  two-thirds  vote  of  both  houses, 
yeas  and  nays  recorded;*''  second,  the  state  should  never  con- 
tract any  debts  for  works  of  public  improvement,  or  be  a  party 
in  carrying  on  such  works,  except  as  a  trustee  in  cases  where 
land  or  other  grants  have  been  made  specifically  for  such  pur- 
poses;'°  third,  the  credit  of  the  state  was  never  to  be  given  or 
loaned  in  aid  of  any  individual  association  or  corporation  ;°^ 
fourth,  no  corporation  was  to  be  formed  under  special  act,  ex- 
cept for  municipal  purposes  j"*-  each   stockholder  in  any  cor- 


45.  Passed  Feb.  26,   1857. 

46.  Laws   of  Minn.,    1857,    Extra   Session,    cli.    99. 

47.  The  Debates  and  Proceedings  of  the  Minnesota  Constitutional 
Convention,  ofRciaUy  reported  by  Francis  H.  Smith  (Dem.); 
Debates  and  Proceeding's  of  the  Constitutional  Convention  for 
the  Territory  of  Minnesota,  T.  F.  Andrews,  official  reporter  to 
the  Convention    (Rep.) 

48.  Folwell,   Minnesota,    p.    141. 

49.  Const,   of  Minn.,   Art.   9,   sec.    5. 

50.  Ibid.,  sec.  5. 

51.  Thid..    sec.    10. 

52.  Art.    10,   sec.   2. 


10  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

poration  was  to  be  liable  to  tlie  amount  of  stock  held;^''  and 
common  carriers  enjoying  rigbt  of  way  privileges  were  to  be 
bound  to  carry  mineral,  agricultural  and  otlier  productions,  or 
manufactures,  on  equal  and  reasonable  terms.'* 

These  are  vital  provisions.  The  first  two  show  that  the 
delegates  at  the  conventions  wished  Minnesota  to  profit  by  the 
example  of  other  states,  which  by  aiding  and  carrying  out  in- 
ternal improvements  had  brought  themselves  to  the  verge  of 
bankruptcy  and  in  some  cases  to  actual  repudiation.^''  Incor- 
poration of  companies  by  special  act  was  forbidden,  to  do  away 
with  the  practice  of  granting  special  privileges  to  railroad  and 
other  companies.'^®  The  clause  was  not  passed  Avithout  oppo- 
sition, for  it  was  firmly  believed  by  many  that  railroad  cor- 
porations necessarily  required  special  privilege,  and  that  it 
would  be  impossible  to  frame  a  general  law  applicable  to  all." 

The  clause  fixing  the  liability  of  stockholders  was  inserted 
to  insure  a  greater  degree  of  responsibility  in  all  commercial 
and  industrial  ventures,  including  railroads  and  railroad  con- 
struction. The  most  advanced  provision  is  that  which  by  im- 
plication declares  railroads  to  be  common  carriers  and  attempts 
to  secure  the  various  industries  of  the  state  against  unjust  dis- 
criminations l)y  obliging  them  to  carry  the  different  products 
at  equal  and  reasonable  terms. 

CHAPTER  II. 

A  COMPARATIVE  STUDY  OF  THE  TERRITORIAL  CHARTERS. 

The  territorial  legislature  of  Minnesota  incorporated  twen- 
ty-seven railroad  companies.  With  the  "Act  to  provide  for 
the  incorporation  and  regulation  of  railroad  companies," 
passed  by  the  first  state  legislature  in  pursuance  of  article  10, 
section  2,  of  the  constitution,  grants  of  special  railroad  charters 
ceased,  at  any  rate  formally.  Old  charters  were,  hoAvever,  fre- 
quently ''revived  and  continued"  and  answered  the  purpose  of 
new  special  charters. 


53.  Ibid.,   sec.   3. 

54.  Art.  10,  sec.  4. 

55.  For  instances  see  Scott,   Repudiation   of  State  Debts. 

56.  Minn.   Constitutional   Debates,   F.   H.   Smith,    reporter;    Speech    of 
Mr.  Sibley,  p-   121. 

57.  Ibid.,  see  pp.   124-177. 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


11 


RA.ILROAD  Charters  Granted  by  the  Territory. 


No.       Name  of  Company. 


9. 
10. 
11. 

12. 

13. 
14. 
15. 

16. 


18. 
19. 
20. 
21. 
22. 
23. 
24. 
25. 
26. 
27. 


St.  Paul  and  St.  Anthony 
Falls, 

Minnesota    Western, 

Louisiana  and  Minnesota, 

Mississippi  and  Lalve  Su- 
perior, 

Lalve   Sup.,   Puget  Sound 
and    Pacific, 

Minn,  and  Northwestern, 

Transit      (not      accepted 

by    company ) , 

Root  R.  Valley  and  South- 
ern Minn., 

Transit, 

Winona  and  LaCrosse, 

Minneapolis  and  St.  Cloud, 

Minneapolis  and  Cedar 
Valley, 

Lake  Sup.  and  Northern 
Pacific, 

Mississippi   and   Missouri, 

Northern   Pacific, 

Lake  Superior  and  Cen- 
tral Minn., 

Hastings,  Minn.  R.  and 
Red  R.  of  the  North, 

Nininger,  St.  Peter  and 
Western, 

Minn.,  and  Dakota, 

St.  Paul  and  Taylor's  Falls, 

Minn.  Air  Line, 

Minn,  and  Pacific, 

Mississippi   Valley, 

Lake  Sup.  and  Crow  Wing, 

Mississippi    R.    Branch, 

Minn,    and    Northwestern, 

Minn.   Central, 

Neb.   and   Lake   Superior, 

(Minn.  Improvement  Co., 
authorized  to  build  a 
railroad). 


Date. 

March  2,1853 
March  3,1853 
March    5,1853 


March    5,1853 
March    4,  1854 


March  2,1855 

March  3,1855 

Feb.  5, 1856 

March  1, 1856 


March  1, 1856 
March  1,1856 
March    1,1856 

March    1,1856 

Feb.     20, 1857 


March  4, 
March  4, 
March  7, 
May      22, 


May 

May 


22, 
22, 


May  23, 

May  23, 

May  23, 

May  23, 

May  23, 


1857 

1857 
1857 
1857 
1857 
1857 
1857 
1857 
1857 
1857 
1857 


Citation,   Session 
Laws  of  Minn. 


1853,  Ch. 
1853,  Ch. 
1853,  Ch. 


12. 

10. 
6. 


March    5,1853        1853,  Ch.    15. 


1853,  Ch. 

1854,  Ch. 


16. 

47. 


March  4,  1854   1854,  Ch. 


1855,  Ch.  24. 

1855,  Ch.  27. 

1856,  Ch.  159. 
1856,  Ch.  160. 


March  1,  1856   1856,  Ch.  166. 


1856,  Ch.  15S,*  p.  301. 
1856,  Ch.  163. 
1856,  Ch.  165. 

1856,  Ch.  158,*  p.  280. 

1857,  Ch.  39. 


1857, 
1857, 
1857, 
1857, 
1857, 
1857, 
1857, 
1857, 
1857, 
1857, 
1857, 


Ch.  7. 
Ch.  24. 
Ch.    17. 

Ex.  Ses.,  Ch.  71. 
Ex.  Ses.,  Ch.  1. 
Ex.  Ses.,  Ch.  27. 
Ex.  Ses.,  Ch.  74. 
Ex.  Ses.,  Ch.  53. 
Ex.  Ses.,  Ch.  49. 
Ex.  Ses.,  Ch.  2. 
Ex.  Ses.,  Ch.  93. 


May      23,1857        1857,  Ex.  Ses.,  Ch.  56. 


Two   chajiter.s   are   numbered    the   same. 


12  MIXNKSOTA    HISTOIUCAL   SOCIETY    COLLECTIONS. 

For  convenience  in  reference,  these  charters  are  numbered 
in  tlie  order  of  their  ai)proval.  AVhere  several  cliarters  were 
granted  the  same  day  the  order  is  ar])itrary. 

Number  27  is  not  inchided  in  the  list  of  railroad  companies 
cliartered  by  th(!  teri-ilorial  le]U:islature,  given  by  the  railroad 
commissioner  in  his  report  in  LSTl.'"'  But  as  it  was  accepted 
by  tlie  company  ^^  and  later  "amciidrd  and  continued,"""  there 
is  no  reason  for  excluding  it. 

These  tei-ritorial  chartei'S  foi'in  an  interesting  comparative 
study.  A  uniform  incorporation  law  would  have  worked  no 
hardship  on  any  of  the  companies  incorporated,  for  all  were  to 
be  built  and  operated  under  very  similar  conditions;  and 
though  conditions  may  have  been  somewhat  different,  an  ex- 
amination of  the  charters  will  reveal  few  variations  which  can 
be  traced  to  any  such  legislative  forethought.  The  form  of  the 
charter,  as  well  as  its  contents,  Avas  in  the  main  determined  by 
the  railroad  promoter,  for  whom  the  varied  charters  of  the 
other  states  served  as  models,  and  not  hy  the  legislature.  The 
charter  proposed  by  the  promoter,  sometimes  amended  to  be 
sure,  became  the  charter  of  the  railroad  company.  For  this 
reason  w'e  find  that  charters  passed  during  the  same  session, 
and  often  on  the  same  day,  are  Ciuite  dissimilar. 

Though  very  dissimilar  in  many  respects,  the  general  plan 
of  the  charters  is  much  the  same  in  all.  In  all  but  two  "^  the 
named  incorporators,  and  their  successors  and  assigns,  are  de- 
clared to  be  a  body  corporate  with  usual  corporate  powers.  A 
part  or  all  of  these  incorporators  are  to  constitute  a  board  of 
commissioners,  under  whose  direction  subscriptions  nuiy  be  re- 
ceived after  due  announcements.  A  certain  amount  of  cash  is 
to  be  paid  down  on  each  share  subscribed  for,  and,  after  a 
specified  amount  of  stock  is  subscribed  and  cash  paid  in,  the 
commissioners  are  to  call  a  meeting  of  stockholders  for  the 
purpose  of  organizing.  A  board  of  directors  is  to  be  elected. 
Every  share  entitles  its  holder  to  one  vote,  and  stockholders 
may  vote  by  proxy.     The  directors  are,  as  a  rule,  given  quite 


58.  Ue])ort  of  the  Railroad  Com.   (Minn.)   for  the  year  1871,  p.  5. 

59.  Record.s   in    the   office   of   the   Secretary    of  State. 

60.  Special  Laws  of  Minn.,   1861,  Ch.   1. 

61.  Nos.   18  and  23. 


RAILROAD  T.KfllSLATIoN   IN   MINNIOSOTA.  -13 

unrestricted  powci's.  They  are  to  iiiaiia^c  llic  affairs  of  tlu; 
(•()inj)any  aud  make  all  needful  rules  and  rea^ulations ;  l)ut  tlio 
provision,  "not  inconsistent  with  llie  constitution  of  the  United 
States  or  with  the  laws  of  this  Ici-ritory,"  is  frc(iucn11y  added. 
The  directors  are  authorized  to  uud\e  "calls"  on  un])ai(l  sub- 
scriptions, within  a  uiaximuiu  anujunt  usually  stated;  and  non- 
compliance, in  all  but  three  cases,  involves  foi'feiture.  The 
amount  of  capital  stock  is  fixed,  but  g'enei-ally  an  ui)[)ei-  limit 
is  mentioned  to  which  it  may  be  i-aised  by  the  directors  with 
the  consent  of  the  nmjority  of  the  stock. 

Right  of  way  is  given  through  ])rivatc  and  ])ublic  property 
and  across  streams,  public  and  ju-ivate  roads,  aud  biglnvays. 
Additional  lands  may  also  be  acquired  when  necessary  foi'  rail- 
road purposes.  In  cases  of  ex|)]-o|)riation,  methods  of  settle- 
ment are  in  all  cases  designated.  The  usefulness  of  roads  and 
streams  is  not  to  be  essentially  impaired. 

Nearly  all  the  charters  provide  for  connecting  and  uniting, 
and  some  also  for  consolidation,  with  other  railroad  companies. 
The  poAver  to  borrow  money,  gixc  security,  and  issue  bonds,  is 
quite  generally  given.  Penalties  are  imixised  for  danuiging  or 
obstructing  the  railroads.  There  is  always  a  time  limit  set  for 
completing  at  least  a  pai't  of  the  projected  railroad,  and  often 
also  for  organizing  the  company  and  beginning  Avork.  JMore 
than  half  of  the  charters  are  declared  to  be  public  acts,  and  in 
most  of  them  provisions  are  made  for  amendment  by  the  legis- 
lature. 

This  is  in  short  the  outline  of  the  nornud  Minnesota  railroad 
charter.  The  plank  road  and  canal  charters  follow  much  the 
same  plan.  But  the  i)rovisions  in  resi)ect  tt>-  these  diflferent 
general  features  vary  considerably,  both  as  to  wording  and 
content,  while  numerous  special  features  are  brought  in.  Some, 
however,  have  many  pi'ovisions  in  comiuon,  with  nuiny  sections 
verbatim  alike,  and  in  a  fcAV  instances  whole  charters  are  al- 
most identical.  With  few  exceptions,  the  charters  may  be 
placed  in  groups,  but  within  these  groui)S  again  some  may  in 
turn  resemble  each  other  more  closely  than  others. 

Numbers  5,  11.  20,  21,  and  25,  may  be  said  to  constitute  one 
such  group.  Number  5  diflPers  from  the  others  mainly  in  ])ro- 
viding  different  exju-oiiriation  proceedings.     Sections  6  to  15, 


14  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

inclusive,  of  number  11,  are  ''adapted  and  enacted  as  parts" 
of  number  24,  "to  be  known  and  numbered  as  therein  known 
and  num])ered."  Numl)ers  5  and  11  name  the  commissioners 
who  are  to  open  books,  wliile  the  otliers  make  this  the  duty  of 
the  incorporators  or  a  part  of  tliem.  Tlie  general  trend  of  tliese 
charters  is  like  some  of  those  granted  by  AVisconsin.  The  riglit 
of  way  proceedings  of  all  but  number  5  are  verbatim  like  those 
found  in  an  amendment  to  tlic  Madison  and  Beloit  railroad 
charter.*'-  The  provision  as  to  borrowing  money  and  issuing 
bonds,  which  may  be  exchanged  for  stock  as  the  directors  may 
provide,  is  much  like  section  16  of  the  Ohio  and  JMississippi 
railroad  charter  of  Illinois;  and  numbers  11,  24,  and  25,  have 
similar  provisions  also  as  to  uniting  and  connecting  with  other 
roads.®'* 

Numbers  18  and  23  are  very  similar,  and  with  these  might 
be  placed  the  railroad  franchises  given  the  Minnesota  Improve- 
ment Company,  but  these  do  not  appear  to  have  been  made  use 
of.  These  two  charters  appoint  the  named  persons  commis- 
sioners, under  the  majority  of  whom  subscriptions  may  be  re- 
ceived; when  the  stockholders  organize,  they  are  to  become  a 
body  corporate.  These  charters  can  easily  be  traced  to  AVis- 
consin. ]\Iost  of  their  provisions  may  be  found  almost  ver- 
batim in  such  charters  as  those  of  the  Lake  Michigan  and  Alis- 
sissippi,"*  ]\Iadison  and  Swan  Lake,"''  La  Crosse  and  Alilwau- 
kee,*"'  Racine,  Janesville  and  Mississijipi,"'  railroad  companies, 
incorporated  by  that  state.  The  fifty-year  corporation  life 
limit  is,  however,  not  found  in  the  AVisconsin  charters.  The 
first  plank  road  charter  granted  in  Alinnesota  °*  may  also  be 
traced  to  the  same  source. 

Another  group  is  numbers  12,  14,  and  15 ;  and  Avitli  these  may 
also  be  placed  numbers  2  and  4.  Number  2  is  very  similar  to 
the  Beloit  and  Madison  railroad  charter.""  Number  4  is  almost 
verbatim  lil^e  that  of  the  New"  Haven  and  Alonroeville  railroad 


62.  Laws   of  Wisconsin,   1851,   p.   203. 

63.  Private  Laws  of  lUinois,   1851,   p.   89. 

64.  Laws  of  Wis.,   1847,   p.   72. 

65.  Laws  of  Wis.,  1851,  p.  172. 

66.  Laws  of  Wis.,   1852,   p.   325. 

67.  Laws  of  Wis.,   1852,   p.   591. 

68.  Laws  of  Minn.,   1849,   p.   91. 

69.  Laws  of  tlie   State  of  W'is.,    1848,   ]>.   161. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  15 

company,  chartered  by  Ohio/°  The  provision  limiting  tlie  l)ond 
issue  to  three-fourths  of  the  amount  actually  expended  may 
be  traced  to  an  amendment  of  the  Beloit  and  Madison  charter." 
The  right  to  reciprocal  use  of  railroads  at  connecting  points 
is  like  section  23  of  the  Northwestern  charter.^^  Judging  from 
internal  evidence,  it  would  seem  that  number  4  came  directly 
from  Ohio,  while  the  others  came  by  way  of  AVisconsin. 

The  largest  group  is  that  which  comprises  numbers  7,  8,  9, 
10,  13,  16,  19,  26,  27,  and  perhaps  also  numbers  6  and  17.  The 
Transit  charter  of  1854,  which  was  not  accepted,  would  have 
belonged  to  this  group.  Number  6  is  derived  quite  directly 
from  the  Illinois  Central  charter.^''  Governor  Gorman  char- 
acterized it  as  substantially  like  tlie  Illinois  Central,  except 
that  it  left  out  nearly,  if  not  quite,  all  the  guards  and  securi- 
ties expressly  provided  for  in  the  Illinois  charter.'^*  In  the 
effort  to  float  capital  into  the  country  to  undertake  railroad 
construction  in  advance  of  the  economic  needs,  frontier  railroad 
legislation  almost  always  had  a  tendency  to  be  very  liberal. 
The  provisions  of  the  charters  of  this  group  may  nearly  all  be 
derived  from  Illinois  charters,  especially  from  the  Illinois  Cen- 
tral. The  provisions  concerning  bell  or  whistle,  railroad  cross- 
ing signs,  badges  to  be  worn  by  trainmen,  and  fencing,  are 
similar  to  those  found  in  Illinois,  wliich  had  been  derived  from 
New  York  charters.  Such  regulations  were  not  so  frecpient  in 
"Wisconsin  and  Ohio  charters.  It  may  be  of  interest  to  note 
that  the  charter  incorporating  the  Minnesota  Point  Ship  Canal 
Company  '^■'  betrays  a  common  origin  with  this  group. 

Numbers  1,  3,  21,  and  22,  do  not  resemble  each  other  par- 
ticularly, nor  do  they  fit  into  any  of  the  foregoing  groups. 
Number  1  is  in  many  respects  very  similar  to  the  AVellsville 
and  Pittsburgh  railway  charter  granted  by  Ohio,^*^  and  also 
to  the  Dayton  and  Western  charter  of  the  same  state. ^^  The 
provision  authorizing  the  borrowing  of  monej''  resembles  an  act 


70.  Local  Laws  of  Ohio,   1836,  p.   357. 

71.  Laws  of  Wis.,   1851,   p.   203. 

72.  Laws  of  Wis.,   1852,   j).   646. 

73.  Private  Laws  of  Ills.,   1851.  j«.  61. 

74.  Council  Journal,   1855,  p.   122. 

75.  Laws   of  Minn.,   Ex.   Ses.,    1857,   Ch. 

76.  Local  Laws  of  Ohio,   1846-7,   p.   183. 

77.  Ibid.,  11.   93. 


16  MINNESOTA    IlISTOIUCAL   SOCIETY    COLLECTIONS. 

autlioi'izing  tlie  ]\Iad  Kiver  and  Lake  Erie  railroad  company 
to  borrow  money. ^** 

In  niiml)or  3  we  litid  llic  first  twelve  sections  practically 
verbatim  like  those  of  the  charter  of  the  Alton  and  Springfield 
railroad, '*'  granted  l).y  the  Illinois  legislature  in  1847,  and  some 
of  the  remaining  s(>ctions  are  also  similar.  One  peculiarity  of 
this  charter  is  that  it  provides  that  in  expropriation  land  shall 
Ix^  taken  "as  provided  by  the  act  [of  Congress]  concerning 
right  of  way  approved  IMarch  o,  1845."  The  words  ''of  Con- 
gress" were  inserted  in  brackets  by  way  of  explanation,  but 
are  misleading.  Congress  passed  no  such  act  on  that  day.  The 
act  cited  is  an  act  of  the  legislature  of  Illinois,*'''  and  was  re- 
ferred to  in  the  Illinois  charter;  this  provision  was  copied  in 
the  IMinnesota  charter  together  with  the  rest. 

Number  22  may  be  traced  to  Wisconsin.  It  bears  a  strong 
resemblance  to  the  Northwestern  "*'  and  the  Beloit  and  Madi- 
son ^-  charters  of  that  state. 

The  provisions  of  number  21  are  mostly  derived  from  AVis- 
consin.  The  first  part  resembles  some  Illinois  charters;^"  but 
the  main  provisions  may  be  found  in  the  Arena  and  Dubuque 
charter  -*  and  the  land  grant  charters  and  enactments  of  Wis- 
consin in  1856.®''  Likewise  the  other  land  grant  enactments  of 
Minnesota  in  1857  may  be  traced  directlj'  to  this  source.  The 
general  railroad  incorporation  law^  of  1858  is  from  beginning 
to  end  almost  verbatim  like  that  of  Ohio.®*^ 

It  would  be  difficult  in  most  instances  to  point  out  with  any 
degree  of  certainty  the  exact  charters  which  served  as  models 
for  those  of  ^Minnesota.  The  similarity  may  in  some  cases 
merely  indicate  a  common  origin.  1  think  it  quite  safe  to  say 
that  Alinnesota  got  nearly  all  her  charter  i)rovisions  from  Ohio, 
AVisconsin,  and  Illinois,  especially  from  the  two  latter.     A  few 


78.  Local  Laws  of  Ohio,   1846,   p.   27. 

79.  Private  Laws  of  Ills.,   1847,  p.   144. 

80.  General    Laws    of   Ills.,    1845,    Ch.    92,    p.    478;    apiirovttl    March    3, 
1845. 

81.  Laws  of   Wisconsin,    1852,   p.    646. 

82.  Ibid.,  p.   55. 

83.  Private  Laws   of   Ills.,    1849,    p.    78;    1851,    p.    61. 

84.  Gen.  Laws  of  Wis.,   1856,  p.   680. 

85.  Ibid.,   p.   239,   Ch.    l.'',7;    i).    217.   Ch.    122. 

86.  Revised  Laws  of  Ohio.    1854,  Ch.   29,   p.   191. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  17 

scattered  provisions  may  have  been  taken  directly  from  New 
York,  Pennsylvania,  or  New  England  charters,  ft  is  but  nat- 
ural that  railroad  promoters  in  a  frontier  territory  like  INlin- 
nesota  should  look  to  the  neighboring  states,  in  which  railroads 
were  developing  under  very  much  the  same  conditions,  for 
charter  models. 

The  length  of  the  charters  varies  from  twelve  to  thirty- 
three  sections,  the  maximum  V)eing  in  numbers  17  and  22, 
which  were  i)assed  in  different  sessions  of  the  same  year.  The 
number  of  incorporators  varies  from  eight  to  twenty-six  (the 
maximum  in  numbers  8  and  27).  The  number  of  incorpora- 
tors, however,  plays  no  important  part.  W.  A.  Gorman,  on 
the  floor  of  the  constitutional  convention  in  1857,  said  that 
many  were  included  merely  for  the  purpose  of  organizing  the 
company  and  never  owned  any  stock  at  all.®'  Mr.  iMeeker 
added  that  probably  one-half  the  names  mentioned  in  the  acts 
granting  charters  are  of  persons  who  are  not  even  aware  that 
such  charters  are  in  existence.''^  In  1858,  when  the  bill  to  in- 
corporate the  St.  Paul  and  St.  Anthony  Railroad  Company  (C. 
F.  No.  7)  was  before  the  house,  it  was  moved  in  the  committee 
of  the  whole  to  amend  the  bill  by  adding  to  the  list  of  incor- 
porators four  new  names  and  the  names  of  the  members  of  the 
legislative  assembly.*^  This  amendment,  however,  was  not 
accepted  by  the  council.  But  seven  new  incorporators  were 
inserted  by  the  house  in  the  bill  to  incorporate  the  Louisiana 
and  Minnesota  (C.  F.  No.  6),  and  the  council  accepted  the 
amendment.'"'  In  the  ^Minnesota  and  Northwestern  charter  the 
names  of  Governor  Gorman  and  Secretary  Rosser  "were  in- 
serted without  being  consulted  on  the  subject,  and  both  gen- 
tlemen were  desirous  that  their  names  should  not  be  used  in 
connection  with  any  act  of  the  legislature  of  this  character."  ^^ 
This  is  indicative  of  the  loose  methods  of  legislation  in  vogue 
at  the  time.  The  incorporators  were  in  no  way  responsible  for 
the  debts  incurred.  The  system  was  vicious  and  would  not  be 
tolerated  anvwhere  but  in  a  frontier  settlement. 


87.  Const.    Debates,    Reported    by    Franci.s   H.    Smith,    p.    225. 

88.  Ibid.,   p.   225. 

89.  Hou.se  Journal,  1853,  p.   138. 

90.  Ibid.,  p.  137. 

91.  Council   Journal,    1855.   p.   212. 


18  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

The  number  to  constitute  the  board  of  commissioners  va- 
ries, and  is  often  quite  indefinite.  In  some  cases  all  the  incor- 
porators or  a  majority  of  them  are  authorized  to  open  books. 
In  two  charters  (numbers  5  and  11)  certain  of  the  incorpora- 
tors are  named  as  commissioners.  The  method  most  frequently 
provided  is  for  the  incorporators  to  appoint  three  of  their 
number  to  serve  in  this  capacity.  Two  charters  (numbers  18 
and  23)  began  by  naming  the  commissioners,  "under  a  ma- 
jority of  whom  subscriptions  may  be  received  to  the  capital 
stock  of  the  railroad  company  hereby  incorporated."  Ten 
charters  ^-  provide  for  the  meeting  and  acceptance  of  the  char- 
ters on  the  part  of  the  incorporators. 

The  amount  of  capital  stock  varies  greatly,  and  not  entirely 
with  the  length  of  the  road  proposed.  The  loAvest  is  $40,000 ; 
and  the  highest  $50,000,000,  with  the  privilege  of  raising  it  to 
$100,000,000.  The  last  is  quite  remarkable  for  a  territory  hav- 
ing taxable  property  listed  at  less  than  two  and  a  half  million 
dollars.  The  legislators  seem  to  have  been  guided  by  no 
economic  principle  as  to  stock  issue.  It  appears  that  neither 
they  nor  the  promoters  had  any  definite  idea  of  the  amount 
of  capital  necessary  to  carry  out  the  enterprise,  but  some  and 
generally  an  ample  amount  was  allowed  as  a  matter  of  course 
to  get  the  work  started.  The  charter  of  the  Minnesota  and 
Northwestern  ®"  was,  however,  an  exception.  It  provided  that 
the  capital  stock  of  that  corporation  should  be  $10,000,000, 
Avhich  might  be  increased  from  time  to  time  to  any  sum  not 
exceeding  the  entire  amount  expended  on  the  road.  This  is  an 
approach  to  capital  stock  regulation,  but  would  most  likely 
not  be  very  effective  in  practice.  Too  much  depended  on  the 
mere  assertion  of  the  company.  Mr.  A.  J.  Edgerton,  the  rail- 
road commissioner,  in  his  report  for  the  j^ear  1873,  said  :  ' '  The 
stock  in  nearly  all  the  companies  has  been  issued  as  a  matter 
of  accommodation  either  connected  with  transfers  or  in  nego- 
tiating bonds.  In  only  a  very  few  companies  does  capital  stock 
represent  any  money  paid  into  tlie  company.  In  some  instances 
the  original  projectors,  or  localities  interested,  subscribed  and 
paid  for  a  certain  amount  of  stock,  but  generally  this  stock 


92.  Nos.   6,   7.   8,  9,   13,   16,   19,   22,   26,   27. 

93.  No.    6. 


RAILROAn  LKGISr.ATION   IN  MINNESOTA.  19 

was  wiped  out  by  sul)se(iueiit  purehuses  of  the  road  by  issuing 
another  class  of  stock.  The  complaint  against  watering  stock 
luirdly  applies  to  railroads  in  this  state  from  the  fact  tliat,  in 
most  instances,  stock  was  issued  without  any  cash  equivalent, 
and  representing  no  material  assets,  and  consequently  was 
luirdly  susceptible  of  dilution.  The  volume  miglit  be  increased 
from  time  to  time,  but  the  consistency  remained  the  same."^* 
Legislation  regarding  capitalization  Avas  lax  in  territorial  days 
and  from  the  above  report  it  would  seem  that  it  continued  lax 
for  some  time  after.  AYith  two  exceptions  (numbers  7  and  13), 
shares  of  the  capital  stock  were  one  hundred  dollars  each. 
Two  charters  (numbers  11  and  24)  authorized  counties,  cities, 
and  towns,  along  railroad  lines  to  buy  stock  and  issue  bonds 
in  payment,  when  so  decided  by  majority  vote. 

We  find  eleven  charters  °''  which  contain  the  provision  that 
shares  shall  be  deemed  personal  propert}'.  This  was  common 
in  railroad  charters  and  in  general  incorporation  laws  of  the 
time.  The  provision  was  found  in  an  amendment  to  a  turnpike 
charter  in  ^Massachusetts  as  early  as  1706.^"  It  had  been  incor- 
porated into  the  ^Minnesota  and  Northwestern  charter  (No.  6), 
and  when  this  charter  Avas  exposed  to  its  fiery  ordeal,  this 
point  Avas  taken  up  for  discussion.  It  Avas  objected  to  because 
if  shares  Avere  deemed  personal  property  the  stock  could  only 
be  taxed  Avhere  the  oAvners  resided.  When  Governor  Gorman 
A'etoed  an  act  to  amend  the  charter  (No.  5,  H.  F.^,  he  stated  in 
his  objections:  "It  is  clear  that  this  provision  Avas  to  avoid 
taxation  in  ^Minnesota.  I  cannot  therefore  let  go  our  right  to 
tax  their  capital  stock  and  all  their  property,  real  and  per- 
sonal."®' This  and  other  objections  Avere  given,  but  they 
seemed  to  have  little  Aveight  as  far  as  this  liill  Avas  concerned, 
for  it  passed  both  houses  easily  by  the  required  two-thirds 
majority,  and  became  a  laAV.^-  But  tAvo  ncAv  charters  granted 
this  year  (numbers  7  and  8>  had  both  been  amended  by  strik- 
ing out  this  clause.®'' 


94.  Ex.   Docs..   1873,  Vol.   II,   p.   132. 

95.  Nos.   5,   6,    10,   11,    13,   19,   20,   21,    24,   25,    27. 

96.  Laws  of  Mass.,  1796,  Ch.   5,   p.   8. 

97.  Council  Journal,    1855,    p.    126. 

98.  Ibid.,  p.  133. 

99.  House  Journal,   1855,  No.   48,   H.  F.,   p.   298;  No.   5,  C.  F.,   p.   296. 


20 


MINNKSOTA    IlISTDUICAL    SOCIETY    COLLECTIONS. 


Till'  jimoiint  of  capital  stock  which  must  be  subscribed  be- 
fore the  stockholders  could  ineet  and  organize  varies  greatly, 
not  only  in  auuMint,  but  also  in  per  cent  of  the  total  capital 
stock.  One  charter  (nuiiihci-  17)  provides  that  .^500,000  must 
be  subscribed,  and  five  per  cent  paitl  down  in  cash;  the  amount 
of  capital  stock  is  to  be  $2,000,0()().  Another  charter  (number 
20),  granted  a1  an  extra  session  the  same  year,  only  requires 
that  "a  suiii  not  more  than  .^50,000  shall  have  been  subscribed 
1o  the  capital  stock,''  which  in  this  case  is  to  be  $5,000,000. 
This  last  was  indeed  a  chance  for  the  railroad  promoter  to 
begin  work  with  little  capital. 

The  maximum  "call"  for  payment  on  capital  stock  is  in 
three  charters  (numl)ers  1,  6,  21)  placed  at  the  discretion  of 
the  directors;  two  charters  (numbers  .".  and  17)  have  no  provi- 
sions at  all  concerning  this  matter;  in  one  (number  20)  the 
maximum  call  is  five  per  cent  i)er  month.  From  five  to  twenty 
per  cent,  ten  per  cent  and  ten  dollars  per  share,  in  each  case 
at  the  discretion  of  the  directors  but  on  at  least  thirty  days 
notice,  are  the  more  common  provisions.  In  three  charters 
(numbers  1,  6,  21 )  it  is  i)rovided  that  when  installments  are 
not  paid,  stock  may  be  sold  at  auction,  and  the  balance  which 
may  be  left  shall  be  paid  over  to  the  owner.  The  other  char- 
ters all  provide  for  forfeiture  of  stock  on  non-payment,  due 
notice  to  be  given  in  all  cases. 

Each  share  entitled  the  owner  to  one  vote,  which  he  might 
exercise  in  person  or  by  pi-oxy.  In  some  -cases  it  is  provided 
that  only  shares  with  ])aid-up  installments  entitle  the  holder 
to  votes.  The  directors  are  to  be  elected  by  majority  vote.  In 
only  one  charter  (number  22)  is  there  any  irregularity  in  these 
respects.  By  this  charter  the  land  gi-ant  companies  are  author- 
ized to  subscribe  to  the  capital  stock  in  proportion  to  the 
length  and  cost  of  the  roads  built  by  each.  The  directors  of 
the  new^  company  are  to  be  elected  from  the  dififerent  com- 
panies wdiich  are  stockholders  in  proportion  to  the  amount  of 
stock  held  ;  but  whenever  individual  subscriptions  amount  to 
.i;200,000,  such  stockholders  shall  be  entitled  to  one  director, 
and  on  larger  subscriptions  in  like  proportion. 

The  number  of  directoi's  varies  from  five  to  fifteen;  and  in 
some  cases  where  llie  companies  are  authorized  to  consolidate, 


RAILROAD  LEGISLATION    IX   MINNIOSOTA.  21 

the  new  board  of  tlireetoi's  is  not  to  exceed  twenly-onc  'I'welve 
and  nine  are  tlie  most  eoininon  nunihcr.s.  Seven  cliarters^"" 
provide  for  a  ])oard  of  twelve  directors  wlio  arc  to  l)e  divided 
into  three  classes,  each  class  lioldin*;  office  for  one,  two,  and 
three  years,  respectively.  After  the  first  election  four  new 
directors  are  to  be  elected  annually  for  a  term  of  three  years. 
In  other  charters  all  the  directors  are  elected  annually.  Direc- 
tors are  to  be  chosen  from  the  stockholders.  One  charter 
(number  (>)  provides  tliat  all  must  be  citizens  of  the  United 
States  and  three  of  them  residents  of  Minnesota;  another 
(numl)er  14),  that  one  must  be  a  resident  of  ^linnesota  ;  a  third 
(number  27),  that  three  must  be  residents  of  Minnesota;  and 
a  fourth  (number  21),  that  a  majority  of  the  ))oard  of  directors 
must  be  citizens  of  ^linnesota.  One  chartcM'  (number  7)  does 
not  mention  the  election  of  directors  'at  all. 

Nearly  all  the  charters  provide  that  the  directors  may  estab- 
lish and  collect  such  "tolls"  or  rates  as  they  may  deem  rea- 
sonable. One  charter  (number  5),  however,  sets  the  maximum 
passenger  rate  at  four  cents  per  mile.  An  amendment  to  an- 
other ""  sets  the  maximum  rate  at  ten  per  cent  above  the  rate 
charged  by  the  Illinois  Central.  Rates  Avere  what  would  induce 
capital  to  build  and  invest,  and  it  was  but  natural  that  the 
legislature  at  the  time  should  be  liberal. 

The  right  of  way  is  in  all  cases  granted  the  railroad  com- 
panies. The  Avidth  of  the  right  of  Avay  varies.  Out  of  the 
twenty-seven  charters,  eight  ^"-  provide  that  land  may  be  taken, 
not  exceeding  one  hundred  feet  in  Avidth ;  one  (number  2)  sets 
the  maximum  at  one  hundred  and  thirty  feet,  except  AAiiere 
more  is  necessary  for  turnouts,  buildings  and  the  like :  another 
(number  17),  at  one  hundred  and  fifty  feet.  In  tAvo  charters 
there  is  no  definite  limit  set,  one  (numl)er  1  )  authorizing  the 
company  to  "enter  upon  any  land,  to  survey,  construct  and  lay 
doAvn  said  road,"  not  mentioning  Avidth  at  all,  the  other  (num- 
ber 3)  authorizing  the  company  to  lay  out  their  road  Avide 
enough  for  a  double  track.  The  remaining  fifteen  provide  that 
the  companies  may  appropriate  to  their  oavu  use  and  control. 


100.  No.«.   6,   S.  9,   10,   1?„   16,   19. 

101.  To  No.  6;  Laws  of  Minn.,   185.5,   p.   &'i 

102.  Xo.s.   4.    12,    14,   15,    18,   22,   2.3,   25. 


22  MINNESOTA   HISTORICAL    SOCIETY    COLLECTIONS. 

for  the  purpose  of  the  railroad  aiul  its  appurtenances,  land  not 
exceeding  two  hundred  feet  in  width.  In  the  second  report 
of  the  industrial  conunission  it  is  stated,  "In  CJalifornia  the 
unusual  liherty  of  laying  out  its  road  not  exceeding  nine  rods 
wide  is  given  the  company."'"'  In  IMinnesota  it  was  quite 
usual  to  authorize  two  hundred  feet,  or  over  twelve  rods.  Pre- 
vious to  1855  the  territory  had  no  authority  to  grant  right  of 
way  through  pul)lic  domain.  Ciovernor  Gorman  called  atten- 
tion to  this  fact  in  his  message  that  year,^'**  just  before  Con- 
gress extended  this  right,  which  had  for  some  time  ])een  en- 
joyed by  states,'*^''  also  to  territories.""^ 

The  method  of  effecting  a  settlement  for  lands  taken  for 
right  of  way  or  for  other  "necessary  purposes,"  where  the 
owner  Avas  absent,  incapable  of  conveying,  or  unwilling  to 
agree,  varied  considerably.  One  charter  (number  5)  provided 
that  in  such  cases  a  jury  of  twelve  men  should  be  summoned 
and  sworn  by  a  justice  of  the  peace  to  ascertain  the  value  of 
the  land  taken.  Another  (number  1)  provided  that  the  dis- 
trict judge,  or  two  justices  of  the  peace,  Avere  to  issue  warrants 
to  the  sheriff  or  marshal  of  the  county  to  summon  three  dis- 
interested freeholders  to  arbitrate  for  the  compensation  to  be 
awarded.  In  four  charters  (numbers  4,  12,  14,  15)  the  com- 
pany and  the  landowners  or  their  representatives  are  each  to 
appoint  an  arbitrator,  and  these  in  turn  to  appoint  a  third,  and 
then  to  i)roceed  to  estimate  the  value  of  the  property  taken  or 
the  amount  of  damages  sustained.  But  if  owners  do  not  agree 
to  arbitrate  (not  in  number  4),  the  company  may  petition  the 
circuit  court,  or  the  district  or  county  court,  for  the  appoint- 
ment of  these  commissioners.  The  remaining  charters  provide 
for  the  appointment  of  three  commissioners  by  some  court  or 
judge.  In  seven "'  the  appointment  is  to  take  place  on  the 
application  of  the  railroad  company;  in  one  (number  22),  on 
application  of  either  dissatisfied  party.  One  charter  (number 
3)  provides  for  such  appointment  only  in  cases  Avhere  owners 
are  absentees  or  incapable  of  conveying  their  lands,  "accord- 


103.  House   Docs.,    5Tth   Cong.,    1st   Session,   Vol.    72,    p.    896. 

104.  Council  Journal.   1855,   p.   125. 

105.  10  U.  S.  Stat.,  28. 

106.  10  U.  S.  Stat.,  683. 

107.  Nos.   1,   2,   11,  20,   21,   24,   25. 


RAILROAD  I.IOGISLATION   IN  MINNESOTA.  23 

ing  to  act  [of  Congress]  concerning  riglit  of  way  approved 
March  3,  1845."     (See  foregoing  page  16.) 

In  the  remaining  charters  '"^  the  three  commissioners  are  to 
be  appointed  on  a  signed  petition  of  the  company,  definitely 
stating  what  lands  are  to  be  taken,  and  after  publishing  the 
fact  for  a  certain  length  of  time.  Tlie  commissioners  appointed 
are  to  be  from  the  county  in  which  the  property  lies.  In  nearly 
all  charters  it  is  provided  that  in  estimating  the  value  of  the 
land  tahen  and  the  damages  sustained,  the  advantages  as  well 
as  disadvantages  to  the  owners  are  to  be  taken  into  account; 
and  some  as  a  precaution  add  that  in  no  case  shall  a  balance 
be  awarded  the  company. 

Most  of  the  charters  provide,  among  the  enumerated  cor- 
porate rights,  that  the  company  may  acquire,  convey,  and  pos- 
sess such  real  and  personal  property  as  may  be  necessary  to 
carry  on  its  business.  The  charters  seem  to  imply  that  an 
effort  shall  first  be  made  to  acquire  the  right  of  way  and  other 
necessary  lands  by  purchase  or  otherwise  before  resorting  to 
expropriation.     Number  21  is  an  exception. 

Some  charters  state  definitely  that  only  an  easement  is 
acquired  on  expropriation.  In  one  charter  (number  3,  section 
7),  how^ever,  there  can  be  no  doubt  that  the  intention  was  to 
convey  in  fee  simple.  In  another  (number  21,  section  13)  the 
idea  seems  to  be  the  same:  "and  whenever  the  amount  of  such 
award  or  judgment  shall  be  tendered  or  deposited  as  afore- 
said, an  absolute  estate  in  fee  simple  in  such  lands  shall  be  and 
become  vested  in  said  company."  A  third  (number  5,  section 
10)  provides  that  on  expropriation  and  settlement  the  company 
shall  have  the  "same  right  to  take,  own  and  possess  said  lands 
and  material  as  fully  and  absolutely  as  if  the  same  had  been 
granted  and  conveyed  to  said  company  by  deed." 

In  other  charters  the  wording  is  more  indefinite.  Number 
7  (section  7)  provides  that  "the  said  corporation  shall  upon 
payment  to  each  party  interested  *  *  *  *  become  in- 
vested and  seized  of  the  title  of  the  lands  or  real  estate  *  *  *  * 
and  entitled  to  the  full,  free  and  perfect  use  and  occupation  of 
the  same  for  the  purposes  aforesaid,  which  are,  for  all  the  ob- 
jects  of   this    act,  hereby  declared   to    be    public    purposes." 

108.      Xos.   6,   7,   8,   9,    ]0,    13,   16,    17,   18,   19,   23,   26,   27. 


24  MINNESOTA    HISTORICAL   SOCIETY    COLLECTIONS. 

Thirteen  charters  ""*  give  free  right  of  way  through  territorial 
or  future  state  lands  "to  be  held  and  possessed  so  long  as  the 
same  shall  be  used  for  such  purposes."  All  but  three  of  these 
(numbers  6,  19,  21)  expressly  exempt  free  right  of  way 
through  school  lands.  Sections  16  and  36  of  every  township 
had  been  reserved  for  school  purposes  by  the  act  of  Congress 
organizing  the  territory.  F'or  right  of  way  through  these  lands 
the  company  must  pay  not  less  than  one  dollar  and  twenty-five 
cents  per  acre  as  determined  by  the  legislature,  the  proceeds 
going  to  the  school  fund. 

Federal  land  grants  figured  largely  in  the  hopes  of  the  ter- 
ritory in  securing  railroads.  Tlie  population  and  wealth  of 
the  territory  did  not  warrant  railroad  construction  on  any 
large  scale,  and  railroad  systems  were  deemed  to  be  essential 
to  the  development  of  the  natural  resources.  One  of  the  first 
charters  (number  2,  section  18)  provided  that  the  "fee  simple 
of  all  lands  granted  along  the  said  railroad  or  otherwise  by  the 
Congress  of  the  United  States,  for  the  iMirpose  of  aiding  said 
road,  may  be  directly  granted  to  said  company  and  shall  be 
vested  in  or  transferred  to  said  company."  Four  other  char- 
ters (numbers  12,  14,  15,  16)  have  like  provisions.  The  charter 
granted  to  the  Minnesota  and  Northwestern  (number  16) 
makes  the  provision  stronger.  The  future  land  grants  "are 
hereby  granted  in  fee  simple,  absolute  and  without  any  further 
act  or  deed."  Number  5  is  authorized  to  "accept  and  hold  to 
its  use  any  grant,  gift,  loan  or  power  of  franchise,  which  may 
be  granted  to  or  conferred  upon  said  company  by  the  laws  of 
any  state  or  of  the  United  States,  or  by  any  person  or  persons, 
upon  such  terms  and  conditions  as  may  be  imposed." 

The  iMinnesota  and  Pacific  (number  21)  was  given  a  part 
of  the  federal  land  grant  of  1857""  in  its  original  charter. 
Three  others  (numbers  7,  8,  and  11)  by  special  enactments  also 
received  parts  of  this  same  grant.  No  mention  of  land  grants  ■ 
had  been  made  in  their  original  charters.  These  grants  were 
to  accrue  to  the  companies  proportionately  on  the  completion 
of  every  twenty  miles  of  railroad. 

Most  of  the  charters  provide  for  connecting,  while  many 

109.  Nos.   6.    T,    8,   9.    l."^.    ]  6,    ]7,    18,    19.    21,   23,    26,    27. 

110.  11  U.  S.  Stats.,   195. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  25 

provide  for  leasing,  purchase,  and  reeii)roeal  use  at  connecting 
points,  or  for  consolidation.  The  charters  do  not  indicate  any 
general  fear  of  monopoly.  One  of  the  last  special  charters 
granted  (number  25)  provides  that  the  company  "shall  have 
the  power  to  unite  its  railway  with  an}^  other  railway  now  con- 
structed or  Avhicli  may  hereafter  be  constructed  in  this  terri- 
tory or  adjoining  states  or  territories,  upon  such  terms  as  are 
mutually  satisfactory  between  the  companies  connecting  *  *  * 
and  shall  have  the  power  to  consolidate  its  stock  with  any  other 
company  or  companies." 

Six  charters^"  provided  for  "reciprocal  use  of  said  re- 
spective roads,"  where  the  roads  connect;  and  in  case  of  dis- 
agreement as  to  terms  either  party  might  appeal  to  the  su- 
preme court  of  the  territory,  "whose  duty  it  shall  be  to  fix 
such  terms  for  the  respective  parties  as  may  be  equitable." 
Others  simply  provide  for  mutual  agreement.  Five  charters  "- 
authorized  the  consolidation  of  stock,  change  of  name,  and  new 
joint  board  of  directors  not  to  exceed  twenty-one  in  number. 
In  some  charters  consolidation  or  connection  with  certain 
named  companies  is  authorized. 

Only  a  few  charters  contain  any  provisions  concerning  tax- 
ation. AVhere  no  special  mention  or  exemption  was  made,  they 
would  be  taxed  as  other  corporations  on  their  capital  stock  and 
all  their  property  both  real  and  personal."'  A  special  form 
of  taxation,  however,  grew  up  in  connection  with  federal  land 
grants  in  aid  of  railroads.  The  Illinois  Central  was  paying 
seven  per  cent  of  its  gross  income  into  the  state  treasury.  It 
was  believed  in  ^Minnesota  also  that  the  territory  ought  to 
secure  a  "fair  resulting  interest"  before  she  parted  with  the 
federal  grants.  They  might  "secure  sufficient  interest  to  pay 
all  the  taxes  of  the  territory  or  future  state,  if  that  direction 
be  advisable,  for  half  a  century  or  more  to  come."  "*  All  that 
the  charter  of  the  JMinnesota  and  Northwestern  secured,  how- 
ever, was  seven  per  cent  of  the  net  earnings  to  be  paid  in  semi- 
annually after  the  company  cleared  twenty  per  cent.    If  num- 


111.  Nos.    2,    12.    14.    15,    22,    27. 

112.  No.s.    12,    14,    15.   22,   27. 

113.  Council  Journal,    1855,   p.   126. 

114.  Council   Journal,   1855,   p.   36. 


20  MINNESOTA    HISTORICAL,   SOCIETY    COLLECTIONS. 

ber  12  got  land  aid,  the  territory  or  future  state  was  to  have 
a  "suitable  resulting  interest"  in  the  lands  and  one  per  cent 
annually  of  the  net  proceeds  of  the  road.  Numl)ers  14,  15,  and 
16,  simply  provide  for  a  "suital)le  resulting  interest,"  in  pro- 
portion to  the  quantity  of  land  granted  and  the  lengtli  of  the 
road  in  the  territory  or  future  state.  Number  21,  and  enact- 
ments giving  land  grants  to  numbers  7,  8,  and  11,  provide  that 
in  consideration  of  grants,  ])rivileges  and  franchises  granted, 
the  companies  shall  pay  three  per  cent  of  their  gross  earnings 
annually  in  lieu  of  all  taxes  and  assessments  whatever,  and  the 
lands  granted  are  to  be  exempt  from  taxation  till  sold  or  con- 
veyed. 

Charters  and  enactments  having  provisions  concerning  fed- 
eral lands  grants  usually  provide  for  carrying  United  States 
mail  and  such  freight  and  passengers  as  may  be  offered  by 
the  government.  This  was  in  accordance  with  conditions  im- 
posed in  the  federal  land  grant  acts.  Two  charters  (numbers 
17  and  22)  have  such  provisions  though  no  promise  is  made 
of  land  grants. 

Some  charters  provide  for  publicity  of  accounts.  Numbers 
6,  11,  20,  and  24,  demand  that  full  and  correct  accounts  of  the 
financial  condition  of  the  companies  be  published  annually. 
Number  6  provided  that  the  charter  would  be  null  and  void  if 
this  annual  report  were  not  made  to  the  governor.  The  others 
had  no  provisions  to  enforce  such  publicity.  With  the  land 
grant  and  gross  income  per  centum  enactments  of  1857,^^-^  pro- 
visions were  made  to  secure  the  territory  its  dues.  The  gov- 
ernor, or  other  duly  appointed  person,  was  authorized  to  in- 
spect the  books  and  papers  of  the  companies,  and  to  examine 
their  officers,  agents  and  employees  under  oath  to  ascertain 
the  truth  of  their  accounts. 

Powers  granted  to  borrow  money  and  issue  bonds  are  very 
liberal.  The  minimum  bond  denomination  is  usually  set  at  five 
hundred  dollars.  This  was  no  doubt  to  insure  against  railroad 
bonds  being  issued  and  used  as  currency.  Number  6  provides, 
as  so  many  charters  of  other  states  had  done,  that  "no  banking 
privileges  are  hereby  granted  said  company." 


115.     Laws  of  Minn.,  1857,  Ex.  Ses.,  Ch.   1. 


RAILROAD  LEGISLATION   IN   MINNESOTA.  27 

The  first  charter  granted  (number  1)  authorized  the  com- 
pany to  borrow  any  amount  of  money  not  exceeding  $200,000, 
and  to  issue  bonds  in  convenient  amounts  not  less  than  one 
hundred  doHars  eaeli.  Seven  charters '^"^  limit  the  bond  issue 
to  three-fourths  of  the  whole  amount  actually  expended  on 
the  "road  and  its  appendages"  at  the  time  of  its  completion. 
Several  charters  authorize  the  companies  to  borrow  on  such 
terms  and  rates  of  interest  as  they  can.  Number  21  expressly 
provides  "any  law  on  the  subject  of  usury  in  this  territory  or 
future  state,  or  any  state  where  such  transaction  may  be  made, 
to  the  contrary  notwithstanding." 

All  the  charters,  excepting  numbers  12,  14,  and  15,  pro- 
vided penalties  for  damaging  and  obstructing  tlie  railroads. 
If  these  provisions  had  all  been  carried  out,  similar  offences 
would  have  been  punishable  in  many  different  ways.  To  illus- 
trate, if  the  damage  were  done  to  the  IMinnesota  Western 
(number  2),  the  guilty  person  would  be  liable  to  treble  the 
damages  to  be  recovered  in  civil  action ;  but  if  done  to  the 
Louisiana  and  Minnesota  (number  3),  chartered  two  days  later, 
he  must  forfeit  treble  damages  and  is  furthermore  guilty  of  a 
misdemeanor,  and  on  indictment  and  conviction  is  liable  to  a 
fine  not  exceeding  $5,000,  for  the  use  of  the  county.  If  the 
damage  were  done  to  the  ^finnesota  and  Northwestern  (num- 
ber 6),  he  must  pay  treble  damages  to  the  company  and  "shall 
be  imprisoned  until  payment  thereof,  unless  sooner  discharged 
by  due  proceedings  of  law;"  he  is  further  subject  to  indict- 
ment, and  may  be  fined  from  $30  to  $1,000,  "to  the  use  of  the 
territory  or  future  state,"  or  may  be  "imprisoned  in  the  pen- 
itentiary or  jail  for  a  term  not  exceeding  five  years,"  in  the 
discretion  of  the  court.  The  St.  Paul  and  Taylor's  Falls  char- 
ter (number  19)  provides  for  double  damages  to  be  paid  to  the 
company ;  the  offender  is  furthermore  guilty  of  a  misdemeanor 
and  on  conviction  must  serve  from  five  to  ten  years  in  the  ter- 
ritorial prison,  and  in  case  of  death  resulting  from  his  misdeed 
he  is  to  be  held  guilty  of  murder  in  the  second  degree.  These 
are  a  few  of  the  many  different  provisions.  This  great  discrep- 
ancy is  due  almost  entirely  to  the  use  of  different  models  in 
drawing  up  the  charters. 

116.     No.s.   2,   10,   12,   14,   15,   16,   27. 


28  MINXIOSf)T.\    lIISToniCAI.    SOCIIOTV    COLLECTION'S. 

There  are  time  limits  set  in  all  the  eharters.  The  time  for 
beginning  work  ranges  from  two  to  five  years.  Number  9  sets 
the  time  at  ten  years,  but  from  the  context  this  must  be  a  mis- 
print. Five  charters""  provide  for  completion  in  ten  years. 
Most  of  them  provide  for  the  building  of  certain  of  the  more 
important  parts  within  a  specified  time.  Two  companies  (num- 
hei's  2  and  10)  are  permitted  to  ])uild  their  roads  in  sections. 
Some  of  the  charters  provide  that  the  grants  and  franchises 
are  null  and  void  if  the  companies  do  not  comply  with  the  time 
i-e(|uirements.  Number  13  provides  that  a  failure  to  comply 
with  any  of  the  ref|uirements  of  that  charter  shall  forfeit  all 
the  cliai'ter  rights  and  privileges.  Similarly  numbers  12,  14, 
and  15,  make  compliance  with  all  terms  and  conditions,  the  con- 
ditions of  the  charter  remaining  in  force  "for  the  full  term  of 
fifty  .years."  These  are  the  only  companies  whose  charters  are 
not  perpetual,  and  this  ]irovision  is  not  found  in  the  models 
from  which  they  were  drawn  up.  In  1853  we  find  that  the  com- 
mittee on  internal  improvements  recommended  that  the  charter 
privileges  asked  for  the  Mississippi  and  Lake  Superior  (num- 
ber 4-}  be  granted  for  the  ]>eriod  of  fifty  years,^^^  l)ut  this  re- 
commendation w;is  not  acted  upon.  In  a  message  to  the  legis- 
lature in  1855  the  governor  said:  "The  modern  doctrim^  is 
now  well  understood  among  public  men,  that  no  corporation 
for  the  concentration  of  large  capital  should  have  perpetual 
and  unaltera])le  charters,  and  in  most  New  England  states  this 
guard  is  reserved  to  the  people  as  it  rightfully  ought  to  be." 
The  three  charters  out  of  the  seven  granted  the  following  year 
were  thus  limited. 

Fourteen  charters"''  pi'ovide  for  amendment.  The  charters 
granted  in  1853  jjrovide  that  the  legislature  may  alter  or 
amend,  or  alter,  ami^nd  or  repeal.  Number  7  provides  that  any 
su])sequent  legislature  may  amend  "in  any  manner."  The 
Transit  (number  8)  is  the  first  one  that  provides  that  the 
amendment  is  not  to  "destroy  or  impair  vested  rights,"  and 
this  provision  is  found  in  all  charters  following  that  make  any 
numtion  of  amendment  a1   all. 


117.      .\()s.    4,    .T.    9.    20,    21. 

lis.      Council   .loiiriuil.    ]S,53.  )i.    4.".. 

119.      Nos.    1,   2.   3,   4,   7.   8.   9,   10.   11.    13,    19,   25.   26,   27. 


RAILROAD  LEGISLATION    IS  MINNESOTA. 


29 


TIu>  house  amended  the  bill  to  ehartei-  the  Transit  Railroad 
Company  l)y  striking-  out  this  elause,'-"  l)ut  the  eouneil  did  not 
concur  and  the  provision  remained.  Nuinhei-  (i  made  no  men- 
tion of  amendment,  l)ut  in  the  amendment  to  this  charter  the 
following  year  it  was  specified  that  the  "legislature  may  re- 
peal, amend  or  modify,  after  the  expiration  of  twenty  years, 
provided  that  compensation  he  made  said  company  for  all  dam- 
ages sustained  thereby. 

A  number  of  the  charters  contain  genm-al  provisions.  In 
the  ^Minnesota  and  Pacific  charter  (number  21)  section  27  es- 
tablishes a  uniform  gauge  of  four  feet  eight  and  a  half  inches 
for  all  railroads  in  the  territory.  In  the  Minnesota  and  North- 
western it  was  provided  that  if  the  charters  were  not  accepted 
by  the  named  incorporators  any  other  company  approved  l)y 
the  governor  and  treasurer  of  the  territory  might  accept  and 
be  vested  with  their  rights  and  subject  to  the  lialulities  set 
forth  in  the  charter.  In  a  rider  to  number  7  a  county  is  organ- 
ized and  its  government  provided  for  and  the  county  seat  of 
another  county  is  fixed.  Reciprocal  rights  with  connecting 
roads  are  provided  for  in  some  charters. 

Fifteen'-^  of  the  charters  provide  that  "this  act  is  hereby 
declared  to  be  a  public  act."  It  is  a  question  whether  this  was 
done  consciously  to  secure  the  right  to  amend.  It  was  most 
likely  done  merely  in  imitation  of  railroad  charters  of  other 
states.  Though  declared  a  "public  act,"  the  Louisiana  and 
^Minnesota  charter  (number  o)  is  found  with  the  other  railroad 
charters,  not  so  declared,  among  the  private  acts  in  the  col- 
lated statutes  of  ^Minnesota,  1853. 

The  charters  Avere  all  very  liberal  to  the  corporations,  as 
the  earlier  charters  of  other  states  had  been.  The  later  expe- 
rience of  neighboring  states,  though  at  times  inade  use  of,  Avas 
not  thoroughly  incorporated  into  the  charters.  ^lany  restric- 
tive provisions  are  found,  but  the  means  of  enforcing  them  are 
generally  quite  wanting.  Railroad  problems  were  not  under- 
stood in  advance  of  actual  experience. 


120.      House   Journal,    1S.55,   ji.    2!i7. 
121.      Nos.   3.   6,   7,   8,   9,   10,   11,   i;:,   I'J.   21,   22,   23,   25,   26,   21 


30  MlNNfOSOTA    mSTOniCAL    SOCIETY    COLLECTIONS. 

ciiaptp:r  ni. 

THE    RAILROAD    BOND    ISSUE    AND    THE    GENERAL    RAILROAD 
INCORPORATION   LAW   OF   1858. 

After  tlie  treaties  of  1851  with  tlie  Indians  at  Traverse  des 
Sioux  and  INFendota,  Avliich  were  ratified  later  l)y  the  Senate 
and  Avere  proclaimed  by  President  Fillmore  in  1853,  the  ter- 
ritory west  of  the  IMississippi  was  thrown  open  to  settlement, 
and  the  population  of  the  territory  increased  by  leaps  and 
bounds.  Prior  to  1855  only  a  little  over  half  a  million  acres 
of  i)ublic  land  had  been  sold  in  Minnesota.  In  1855  over  a  mil- 
lion acres  were  transferred  to  settlers,  and  in  1856  nearly  two 
and  a  half  million  acres. ^-- 

Only  a  relatively  small  area  was  under  cultivation;  but  the 
territorial  newspapers  and  the  prospectuses,  handbooks  and 
other  literature  scattered  broadcast  at  the  time,  picture  the 
agricultural  possibilities  in  the  most  glowing  terms.  Lum])er- 
ing  was  one  of  the  chief  industries  and  the  rivers  began  to 
teem  Avith  logs.  Villages  sprang  up  as  if  by  magic,  often  in 
anticipation  of  rural  settlement  and  of  industrial  and  commer- 
cial enterprise.  Sawmills  were  run  to  their  full  capacity,  fre- 
quently night  and  day,  to  supply  the  enormous  demand  for 
building  materials.  Land  offices,  hotels,  and  livery  stables,  did 
a  flourishing  business  everywhere. 

Speculation  was  rife  on  all  sides.  Unim{)roved  lands, 
bought  for  one  dollar  and  a  quartei-  an  acre  in  the  winter  of 
1856,  were  surveyed  and  city  lots  recorded.  In  1837  many  of 
these  lots  were  sold  to  eager  buyers  at  fifty  dollars  an  acre, 
even  though  there  was  not  even  a  log  cabin  in  sight. ^-'  Such 
I)aper  towns  were  at  times  laid  out  within  a  mile  of  each 
other.  In  older  settlements  city  lots  bought  for  five  hundred 
dollars  in  the  morning  might  sell  for  a  thousand  in  the  after- 
noon of  the  same  day.^-*  The  value  of  corner  lots,  factory 
sites,  and  water  power  privileges,  was  largely  speculative,  de- 


122.  Parker,   Handbook   for  Minnesota,    1856-7,    p.    11:.'. 

123.  Department  of  Agriculture,   Report,   186.'^,   p.   :;6:   Lillcr  ut  <  >.   II. 
KeUey,   Itasca. 

124.  Parker,  Minn.  Handbook  for  1856-7,  p.   20;   oiic  sueli   sale  in    Utd 
Wing  described. 


KAILKOAD  LEGISLATION   IN  MINNESOTA. 


31 


pending  to  a  great  extent  on  tlie  final  location  of  the  proposed 
railroads.  Property  values  in  general  were  abnormally  liigh. 
These  "Avild  riots  of  financial  adventure"  came  to  an  ab- 
rupt close.  The  Ohio  Life  Insurance  and  Trust  Company  of 
New  York  failed  before  the  IMinnesota  constitutional  conven- 
tion adjourned.  Other  large  eastern  corporations  followed 
suit,  and  the  panic  of  1857  Avas  precipitated.  When  the  news 
reached  ^Minnesota,  cash  and  credit  disappeared,  and  likewise 
thousands  of  speculators  who  had  been  caught  unawares. 
Paper  city  lots  lost  their  charms,  land  agencies  closed  their 
doors,  factories  and  mills  soon  came  to  a  standstill.  For  a 
time  it  seemed  as  though  the  tide  of  immigration  had  turned, 
and  that  Minnesota  was  about  to  be  depopulated.  The  taxable 
property  of  the  state  had  increased  one  hundred  and  two  per 
cent  in  1857.  In  the  two  following  years  there  was  an  actual 
decrease  of  about  thirty  per  cent  in  valuation.^ ^'  The  follow- 
ing table  shows  the  number  and  area  of  town  plats  recorded 
from  1853  to  1859  in  eighteen  counties  with  forty-seven  per 
cent  of  the  population  of  tlie  state : 


No.  of  town 

sites. 

No.  of  lots. 

No.  of  acres, 

1853 

3 

1,567 

657 

1854 

30 

8,354 

2,719 

1855 

44 

20,944 

5,196 

1856 

107 

39,683 

13,966 

1857 

182 

90,584 

20,855 

1858 

50 

18,076 

4,689 

1859 

12 

4,932 

1,462 

The  state  commissioner  of  statistics,  in  his  report  for  the 
year  ending  January  1,  1860,  estimated  the  total  area  occupied 
by  town  lots  at  over  100,000  acres,  or  tAventy-two  per  cent  of 
the  cultivated  area  of  the  state.  Of  the  estimated  374,000  city 
lots,  362,000  were  unoccupied  and  unimproved.^-"  Judging 
from  the  decrease  in  the  number  of  votes  cast,  and  from  re- 
ports of  a  number  of  towns  and  cities,  the  commissioner  con- 
cluded that  the  urban  population  had  decreased  tAventy  per 
cent  since  1857.  St.  Paul,  the  capital  and  largest  city,  is  said 
to  have  lost  half  its  population  during  the  panic.  This  pop- 
ulation Avas  in  the  main  transferred  to  agricultural  pursuits, 

125.  Commissioner  of  Statistics,  Minn.,   First  annual  report,   for  the 
year  ending-  Jan.   1,  1860,  p.   147. 

126.  Ibid.,   pp.   148-9. 


32  MINNESOTA    IIISTOIUCAL   SOCIETY    COLLECTIONS. 

and  as  a  consequence  the  cultivated  area  was  more  than 
doul)hHl  in  1858  and  in  some  counties  more  than  quadrupled, 
while  the  population  of  the  state  as  a  whole  increased  only 
6,000  as  compared  with  an  increase  of  about  50,000  in  the  pre- 
vious year. 

Prior  to  1857  agriculture  had  not  been  materialh'  devel- 
oped in  Minnesota.  Speculation  in  city  lots  had  proved  more 
fascinating;  tlian  Avheat  raising.  Many  of  those  who  had  tried 
fai-ming  had  not  met  with  the  best  of  success.  The  army 
woi-m  paid  a  visit  in  1855,  and  grasshopper  raids  followed  in 
185G  and  1857.'-'  AVhen  the  panic  and  hard  times  came,  the 
farmer  suffered  with  the  rest. 

On  receiving  the  federal  land  grants,  iMinnesota  had  felt 
assured  of  railroads  in  the  immediate  future ;  but  the  panic 
nipped  the  promising  railroad  construction  in  the  bud,  and  the 
people  began  to  fear  that  the  land  grants  would  eventually  re- 
vert to  the  government  on  account  of  the  inability  of  the  rail- 
road companies  to  meet  the  time  requirements  specified  in  the 
grants. 

AVhen  the  legislature  convened  in  December,  1857,  it  im- 
mediately set  about  to  devise  some  plan  whereby  it  might 
relieve  the  financial  situation  and  help  the  railroads.  It  was 
hampered  by  the  constitutional  provision  forbidding  the  gift 
or  loan  of  state  credit  to  any  individual  association  or  cor- 
poration.^-* Accordingly  a  constitutional  amendment  was  pro- 
posed '-"  which  authorized  the  issue  of  state  bonds  to  the  ex- 
tent of  i|^l, 250,000  to  each  of  the  four  land  grant  railroad  com- 
panies. The  bonds  were  to  be  issued  and  delivered  at  the  rate 
of  i}^100,000  for  every  ten  miles  of  road  ready  for  superstruc- 
ture and  another  $100,000  for  every  ten  miles  "actually  com- 
pleted and  cars  running  thereon." 

The  railroads  were  to  pay  the  interest  on  the  state  bonds 
and  all  expenses  connected  with  their  issue.  The  net  profits 
of  the  companies  were  pledged  for  the  payment  of  the  interest. 
The  first  two  hundred  and  fortv  sections  of  land  accruing  to 


127.  Dfpartmcnt    of    Agricultiirf,    Report    for    1863,    p.    ."6,    letur    by 
O.  H.  Kelley. 

128.  Const,  of  Minn.,   Art.   IX,   sec.   10. 

129.  General  Laws  of  Minn.,   1858,  cli.   1. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  33 

eaeli  company  were  to  be  placed  by  deed  trust  at  the  disposal 
of  the  governor  and  secretary  of  state.  As  further  security  the 
railroads  were  to  give  first  mortgage  bonds  on  their  roads,  lands, 
and  franchises,  to  the  full  value  of  the  bonds  received  from 
the  state.  Each  railroad  company  was  placed  under  obliga- 
tion to  complete  fifty  miles  of  its  road  before  the  close  of  the 
year  1861,  one  hundred  miles  by  the  close  of  1864,  and  four- 
fifths  of  its  road  by  1866. 

The  constitution  made  necessary  the  enactment  of  several 
general  incorporation  laws,  for  the  incorporation  of  some  kinds 
of  corporations  was  not  provided  for  in  the  general  incorpora- 
tion laws  in  force  at  the  time.^^°  Accordingly  the  legislature 
passed  a  number  of  new  incorporation  laws,^^^  among  them 
"An  act  to  provide  for  the  incorporation  and  regulation  of 
railroad  companies. "  "' 

The  law  is  almost  verbatim  like  that  enacted  in  Ohio  in 
1852.^^^  Its  provisions  in  the  main  do  not  differ  materially 
from  those  found  in  various  special  charters  of  the  time,  but 
the  fact  that  all  future  railroad  companies  were  to  be  subject 
to  the  same  laws  was  in  itself  a  decided  step  in  advance ;  for 
the  evident  inconsistency  and  unnecessary  confusion,  if  not 
actual  injustice,  of  incorporating  similar  companies  under  dif- 
ferent laws  would  be  done  away  with. 

According  to  the  new  law  any  number  of  persons  not  less 
than  five  might  incorporate  a  railroad  company  by  filing  with 
the  secretary  of  state  a  sworn  certified  statement  specifying 
the  name  of  the  company,  the  name  and  residence  of  each  of 
the  persons  forming  the  association,  the  termini  of  the  pro- 
posed road  and  the  county  or  counties  through  which  it  would 
pass,  and  lastly  the  amount  of  capital  necessary  to  construct 
the  road.^"* 

The  state  attempted  no  direct  control  of  stock  issue. 
Though  limited  in  'the  first  instance  to  the  amount  of  capital 


130.  Statutes  of  Minn.,    1851,   chs.   36-42,   incl. 

131.  See    Statutes    of    Minn.,    1849-1858,    ch.    XVII,    pp.    274-337;    Cor- 
porations,  their   formation   and   regulation. 

132.  General  Laws   of   Minn.,    1858,    ch.    70. 

133.  Laws  of  Ohio,  Vol.  50,  p.  274;  Act  approved  May  1,   1852. 

134.  General  Laws  of  Minn.,   1858,  ch.  70,  sec.   1. 
3 


34  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

declared  necessary  for  tlie  construction  of  tlie  road,  the  amount 
of  capital  stock  might  later  be  increased  by  the  directors  if 
they  deemed  it  necessary  and  secured  the  consent  of  a  ma- 
jority of  the  stock  already  issued.^''''  The  borrowing  power  of 
the  railroad  company  was  limited  to  an  amount  not  exceeding 
its  authorized  capital  stock.  The  bonds  and  promissory  notes 
issued  might  be  secured  by  pledging  property  and  income,  but 
were  not  to  bear  more  than  eight  per  cent  interest.^''*' 

Railroad  companies  Avere  permitted  to  consolidate  when- 
ever any  portion  of  their  lines  was  so  constructed  as  to  admit 
of  continuous  passage.  One  railroad  company  might  aid  other 
companies  in  bringing  about  such  connection  by  subscription 
of  capital  stock  or  otherwise  and  was  authorized,  after  con- 
nection had  been  made,  to  buy  or  lease  these  lines,  or  to  make 
such  "arrangements  for  their  common  benefit"  as  might  be 
agreed  upon.^"  There  was  no  mention  made  of  parallel  and 
competing  lines,  of  which  so  much  is  heard  later. 

Every  railroad  company  incorporated  under  the  new  law- 
was  required  to  make  a  full  annual  report  to  the  state  auditor. 
This  report  was  to  give  the  amount  of  capital  stock  of  the 
company,  the  gross  receipts  for  the  year,  the  cost  of  repairs 
and  incidental  expenses,  the  net  amount  of  profits  and  the  divi- 
dends made,  with  such  other  facts  as  might  be  necessary  to 
show  the  condition  of  its  affairs.  The  auditor  was  to  transmit 
an  abstract  of  such  reports  to  the  legislature.^"^  No  authority 
was  given,  however,  to  investigate  the  accuracy  of  the  reports, 
and  no  penalties  were  provided  for  in  case  the  companies  neg- 
lected or  refused  to  report. 

The  most  interesting  feature  of  the  laAV  from  the  point  of 
view  of  state  regulation  is  the  fixing  of  maximum  rates  of 
freight  and  fare.  No  railroad  incorporated  under  the  laAV  Avas 
permitted  to  demand  or  receive  for  the  transportation  of  pas- 
sengers more  than  three  cents  per  mile,  nor  more  than  five 
cents  per  ton-mile  for  the  transportation  of  property  Avhen 
transported  tliirty  miles  or  more,  but  if  transported  less  than 


1?,5.  Ibid.,   sec.  7. 

136.  Ibid.,   sec.  13. 

137.  Ibid.,   sec.  24. 

138.  Ibid.,  sec.  18. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  35 

thirty  miles  sucli  reasonal)le  rates  might  be  charged  as  were 
fixed  by  the  compaii}^  or  prescribed  by  hiw.^''^ 

The  special  charters  had  nearly  all  given  over  to  the  com- 
panies the  right  to  fix  their  own  rates,  but  the  state  legisla- 
ture of  1858,  in  following  the  lead  of  Ohio,  asserted  its  right 
to  regulate  rates  on  roads  thereafter  incorporated.  In  the 
general  incorporation  act  for  plank  road  and  turnpike  com- 
panies enacted  in  1851,  the  legislature  had  expressly  reserved 
its  right  to  regulate  the  rates  of  toll.^^"  This  law  was  still  in 
force  and  the  same  principle  was  now  applied  to  railroads. 

But  though  the  legislature  fixed  maximum  rates  of  charges, 
it  provided  no  means  for  the  enforcement  of  the  law,  and  at- 
tached no  penalties  for  its  violation.  The  companies  were  evi- 
dently supposed  to  comply  with  this  and  other  requirements  of 
their  own  free  will. 

The  legislature  of  1858  had  planned,  by  its  proposed  amend- 
ment to  the  constitution  approved  by  the  governor  IMarch  9,  to 
expedite  the  construction  of  railroads,  save  the  land  grants, 
and  secure  a  safe  currency  for  the  people. ^*^  The  electors  rat- 
ified the  amendment  by  an  "overwhelming  majority  of  votes" 
the  following  April. ^*- 

But  this  specious  financial  scheme  proved  a  dismal  failure 
in  every  way.  The  railroad  companies  did  not  proceed  accord- 
ing to  the  spirit  of  the  amendment.  They  refused  to  give  ex- 
clusive first  mortgage  to  the  state,  and  won  out  against  the 
governor  in  the  courts.'*"^  On  the  other  hand  the  people  never 
regarded  the  bonds  as  state  obligations  at  all.  Sixty-seven 
members  of  the  legislature,  who  had  voted  for  the  bond  issue, 
publicly  pledged  themselves  never  to  vote  for  a  tax  to  pay 
them.  The  bonds,  which  at  first  were  eagerly  bought  at  par, 
could  not  be  disposed  of  at  any  reasonable  pi-ice  despite  the 
best  efforts  of  the  governor  and  of  the  companies.^** 

139.  Ibid.,   sec.   12.      (Verbatim  from  the  Ohio  Law,  sec.  13.) 

140.  Statutes   of  Minn.,    1851,   ch.   39,   sec.    55. 

141.  House  Journal,  1859-60,  p.  389  ff.;  Report  of  a  special  com- 
mittee on  railroads,  railroad  grants,  and  Minnesota  railroad 
bonds.  General  laws,  1858,  chs.  32  and  33;  Banking  act  and 
an  amendment  to  the  same. 

142.  Ibid.,   p.   15. 

143.  2  Minn.,  13;  application  of  Minn,  and  Pac.  for  a  mandamus 
against  Governor   Sibley   upheld. 

144.  House    Journal,    1859-60,    p.    15;    Governor's    Message. 


36  MINNESOTA   IIISTOUICAL   SOCIETY    COLLECTIONS. 

For  a  while  the  work  of  tlie  construction  coinpanios  was 
carried  on  witli  rapidity,  if  not  thorouglmess,  and  a  great  num- 
ber of  bonds  were  issued  according  to  tlie  agreement,  which 
was  construed  li])erally  for  tlic  railroad  companies.  These 
bonds  were  sold  and  hypothecated  at  a  ruinous  discount,  mostly, 
it  was  ])elieved,  to  speculators.  Before  long  construction  oper- 
ations had  to  cease  for  lack  of  funds.  The  companies  had  no 
capital  or  credit  of  their  own  and  had  depended  almost  en- 
tirely on  the  proceeds  from  the  state  bonds.  AVhen  the  rail- 
roads realized  their  mistake,  they  offered  to  submit  to  the  con- 
ditions originally  imposed  by  the  governor,  namely,  to  issue 
exclusive  first  mortgage  bonds  to  the  state, ^*"'  but  their  sub- 
mission came  too  late.  They  were  by  this  time  entirely  dis- 
credited.^^" 

In  all,  $2,275,000  in  bonds  were  issued.  All  that  could  be 
shown  for  this  large  sum  was  two  hundred  and  forty  mih^s  of 
"incomi)lete,  fragmentary  and  disjointed  portions  of  grad- 
ing," Avhieh  luul  cost  on  the  average  less  than  $3,000  per  mile. 
Only  fifty  miles  of  well-built  superstructure  was  ready  for  the 
rail.'^' 

AYlien  the  legislature  met  in  December,  1859,  Governor 
Ramsey  in  his  message  admitted  the  folly  of  attempting  to 
loan  the  state  credit  to  the  land  grant  railroad  companies. 
He  recommended  their  dispossession  and  the  transfer  of  their 
interests  to  more  responsible  hands.  He  counselled  strongly 
against  any  form  of  repudiation,  but  recommended  that,  since 
the  outstanding  bonds  could  at  the  time  be  secured  on  favor- 
able terms,  they  ought  to  be  bought  in  and  Avithdrawn  imme- 
diately and  new  bonds  issued  instead. 

The  legislature  could  hardly  be  expected  to  follow  this  last 
recommendation.  Its  members  reflected  the  sentiment  preval- 
ent throughout  the  state.  The  great  majority  of  the  people 
absolutely  disowned  the  "swindling  bonds,"  as  they  were 
called,  and  claimed  that  those  who  held  the  bonds  had  bought 


145.  Tenth    Census    Report.    \  ol.    VII,    pp.    G32-634,    gives   an    account 
of  Minnesota's  bonded   debt. 

146.  House  Journal,   1859-60,   p.   15. 

147.  House  Journal,  1859-60,  p.  390;  Report  of  tlie  concurrent  com- 
mittees on  railroads,  railroad  grants,  and  Minn,  railroad  bonds. 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


37 


them  on  speculation  at  a  large  discount,  fully  realizing  the  risk 
they  were  taking. 

A  joint  committee  on  railroads,  i-ailroad  grants,  and  ]\lin- 
nesota  railroad  bonds,  was  appointed.  This  coininittec  con- 
ducted an  extensive  investigation  of  the  controverted  question 
and  made  several  reports.  Heated  discussions  were  carried  on 
in  both  Houses,  but  it  proved  hard  to  come  to  any  satisfactory 
conclusion. 

Early  in  the  session  the  governor  was  directed  by  a  joint 
resolution  to  destroy  the  blank  and  unissued  ^Minnesota  state 
railroad  bonds  in  the  presence  of  a  joint  legislative  commit- 
tee.^*^ They  would  at  any  rate  make  sure  that  no  more  were 
issued. 

The  railroad  companies  having  defaulted  in  the  payment  of 
interest  on  the  bonds  issued  by  them  and  held  by  the  state, 
it  was  the  duty  of  the  governor  to  foreclose  the  deeds  of  trust 
held  for  the  state. ^■"'  This  the  retiring  governor  had  not  done. 
By  an  act  passed  toward  the  close  of  the  session,  it  was  made 
the  duty  of  the  governor  to  foreclose  the  deeds  of  trust  if  in 
his  opinion  the  public  interest  required  it.  He  was  further- 
more authorized  at  his  discretion  to  bid  in  for  the  state  the, 
property,  rights,  and  franchises  of  the  companies  at  such  sale.^'° 

A  few  days  later  two  amendments  to  the  constitution  were 
proposed  by  a  concurrent  resolution.^ "^^  According  to  the  first 
no  law  levying  a  tax  or  making  other  provision  for  the  pay- 
ment of  interest  or  principal  of  the  IMinnesota  state  railroad 
bonds  was  to  be  effective  before  ratified  by  a  majority  vote  of 
the  electors  of  the  state.  The  second  amendment  forbade  the 
further  issue  of  bonds  under  what  "purports  to  be  an  amend- 
ment to  section  ten  of  article  nine  of  the  constitution,"  and 
expunged  this  amendment  from  the  constitution,  reserving  to 
the  state,  nevertheless,  all  rights,  remedies,  and  forfeitures 
accruing  under  it. 

This  resolution  secured  tlie  approval  of  Governor  Ramsey 


148.  General   Laws,    1860,   p.   303;  Joint   Resolutions,   No.   4,   approved 
Jan.   13. 

149.  Cf.    General   Laws,    1860,    ch.    88,    sec.    1,    with    General   Laws    of 
1858,  ch.   1,  sec.   1,  p.   11. 

150.  General   Laws,    1860,    ch.    88,    approved    March    6. 

151.  Ibid.,   p.   297;  Concurrent  Resolution,  No.   1,  apiiroved   March   10. 


38  MINNESOTA    IllSTOIilCAL    SOCIETY    COLLECTIONS. 

and  at  the  followinj2:  November  election  the  amendments  were 
ratified  hy  an  ahuost  unanimous  vote  of  the  electors.  The  i)eo- 
ple  believed  the  state  had  been  hoodwinked  by  designing  poli- 
ticians and  railroad  men  in  the  first  instance,  and  they  con- 
strued proposals  of  settlement  or  adjustment  as  indications 
of  further  corruption.  If  refusing  to  acknowledge  the  validity 
of  these  state;  l)onds  was  repudiation,  they  were  quite  willing 
to  bear  the  odium.  They  rathei-  looked  upon  such  repudiation 
as  a  vindication  of  theii-  honor. 


CHAPTER  IV. 

THE  EVENTUAL  ADJUSTMENT  OP  THE   STATE  RAILROAD 

BONDS. 

The  people  of  the  state  would  gladly  have  consigned  the 
repudiated  Minnesota  State  Railroad  Bonds  to  oblivion,  but 
those  who  held  the  bonds  were  not  so  ready  to  forget.  Bonds 
with  a  par  value  of  $2,275,000  ^■"'-  and  their  coupons  attached 
were  not  to  be  given  up  without  a  struggle.  The  state  not 
])eing  suable,  the  case  had  to  be  fought  out  with  the  legisla- 
ture and  with  the  people  who  had  voted  the  repudiation. 

Nothing  was  done  by  the  legislature  before  18(56,  when  it 
passed  an  "act  for  the  equitable  adjustment  of  the  state  rail- 
road bonds."  This  act  provided  for  the  appointment  by  the 
governor  of  a  committee  of  three  to  investigate  who  the  hold- 
ers of  the  railroad  bonds  were  and  what  the  bona  fide  holders 
had  paid.  They  were  authorized  to  re(?eive  bids,  and  all  claims 
not  presented  before  January  1,  1867,  were  to  be  forever 
barred.'-'"'  This  attempt  at  securing  an  equitable  adjustment 
proved  futile. 

Early  in  1866  it  was  discovered  that  IMinnesota  had  a  claim 
to  500,000  acres  of  internal  improvenu'nt  lands  under  an  act 
of  Congress  approved  September  4,  38-11.' '^     These  lands  were 


152.  Railroad  Company.  Bonds  Issued.  Amount  of  grading:. 
Minn,  and  Pac,  |600,000  62  mi.,  3,213  ft. 
MpLs.  and  Cedar  Valley,  600,000  6914  mi. 
Transit,  500,000  50  mi. 
Soutliern    Minn.,                        575,000     Minn.  Valley,  371-^   mi.;  Root 

R.    Branch.    20    mi.,    1,004    ft. 

153.  General  Laws,   1866,  ch.   5,   p.   <». 

154.  5  U.   S.   Stat.,   453,   ch.   16.  sec.   8. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  39 

to  have  accrued  to  the  state  on  her  admission  into  the  Union 
in  1858,  but,  perhaps  on  account  of  the  large  land  grants  of 
1857,  the  older  general  grant  was  overlooked.  When  Governor 
Marshall  had  his  attention  called  to  this  claim  by  Mr.  Drake, 
later  president  of  the  St.  Paul  and  Sioux  City  railroad  com- 
pany, he  immediately  had  the  matter  investigated,  with  the  re- 
sult that  the  Secretary  of  the  Interior  conceded  the  claim  to 
the  state.^^^ 

The  governor  now  thought  that  he  saw  a  practicable  solu- 
tion to  the  state  bond  difficulties.  The  bonds  had  been  issued 
to  secure  internal  improvements;  these  lands  were  given  to  the 
state  for  this  same  purpose.  He  therefore  believed  that  the 
lands  might  properly  be  given  to  settle  the  outstanding  bonds. 
In  this  way  the  stigma  of  repudiation  could  be  removed  from 
the  state  without  subjecting  the  people  to  taxation.  He  brings 
out  these  points  strongly  in  his  message  to  the  legislature  in 
1867,  and  appeals  to  their  sense  of  honor  and  their  state  pride. 
He  assumes  that  the  people  generally  believe  something  is  due 
on  the  bonds  and  that  they  intend  to  pay  whatever  is  justly 
due.  He  suggests  two  ways  of  disposing  of  the  lands  with  this 
object  in  view.  Either  the  proceeds  of  this  sale  may  be  set 
apart  as  a  sinking  fund  to  pay  whatever  ultimately  is  due  to 
the  bondholders,  or  the  bondholders  may  be  given  the  lands 
in  exchange  for  their  bonds.^^*' 

The  legislature  followed  the  recommendation  of  the  gov-) 
ernor.  It  passed  an  act  providing  that  the  proceeds  to  the 
state  from  the  federal  land  grant  of  1841  and  the  gross  income 
percentage  paid  in  by  the  railroads  after  the  passage  of  this 
act  were  to  be  set  aside  as  a  sinking  fund  for  the  adjustment 
of  the  Minnesota  State  Railroad  Bonds.^"  Certain  judgments 
recovered  in  the  district  court  of  Ramsey  county  against  the 
Minneapolis  and  Cedar  Valley  railroad  company  for  construc- 
tion work  were  recognized  by  the  legislature  and  placed  for 
payment  on  the  same  footing  with  its  state  railroad  bonds.^^^ 

The  people,  however,  were  not  yet  ready  for  any  such  set- 


155.  Exec,   docs.,   1866,   p.   18;   1867,   p.   23. 

156.  Ibid.,   1866,  pp.   18-20;  Governor's  Message,  Jan.    10,   1867. 

157.  General  Laws,  1867,  eh.  53. 

158.  Special  Laws,  1867.  ch.   152. 


40  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

tlement;  and  when  the  act  was  submitted  to  tlie  electors,  ac- 
cording to  the  constitutional  amendment  of  1860,  it  was  re- 
jected by  a  vote  of  49,763  to  l,935.i''^ 

When  the  next  legislature  met  in  1868  Governor  ]\rarshairs 
position  was  unchanged,  but  the  legislature  was  not  prepared 
to  take  any  definite  action  in  view  of  the  recent  second  repu- 
diation by  the  people.^ ^°  The  people  had  no  intention  of  pay- 
ing the  "swindling  bonds  of  '58,"  and  suspected  those  who 
worked  for  an  adjustment  of  collusion  with  the  bondholders. 
The  committee  appointed  by  the  governor  the  previous  year 
reported  to  the  legislature  the  results  of  its  investigations.  Ac- 
cording to  this  report  the  holder  of  the  largest  amount  of  rail- 
road bonds  was  Mr.  Selali  Chamberlain,  a  railroad  contractor. 
He  claimed  that  his  bonds  had  cost  him  above  par  in  work  and 
material  furnished.  The  committee  had  employed  an  experi- 
enced engineer  to  examine  the  work  done,  and  he  reported  that 
the  grading  had  only  cost  $2,843.42  per  mile,  instead  of  $9,500 
as  alleged  by  Mr.  Chamberlain.  Some  holders  had  admitted 
paying  as  low  as  seventeen  and  a  half  cents  on  the  dollar  for 
their  bonds.  The  report  of  this  committee  naturally  confiriued 
the  people  of  the  state  in  their  belief  that  they  were  not  deal- 
ing with  honest  creditors  with  just  claims. ^''^ 

An  amendment  to  the  constitution  was  proposed  by  the  leg- 
islature, providing  tliat  no  law  disposing  of  the  internal  im- 
provement lands  or  of  the  proceeds  from  them  was  to  be  oper- 
ative until  it  had  been  ratified  by  a  majority  vote  of  the  elec- 
tors. The  legislature,  liowever,  might,  without  such  vote,  pro- 
vide for  the  appraisal  and  sale  of  the  lands  and  the  investment 
of  the  proceeds  in  state  or  national  securities.^''-  If  this  amend- 
ment were  ratified,  what  would  prevent  the  legislature  from 
investing  such  proceeds  in  Minnesota  state  railroad  bonds? 
The  people  refused  to  take  any  such  chances  and  the  amend- 
ment was  lost.^"'* 

In  1869  Governor  ^Marsliall  sent  a  special  message  to  the 


159.  A.    J.    Edgerton,    Compilation    of    the    railroad    laws    of    Minn. 
(1872),   p.  43,   footnote. 

160.  Red   WMng-  Argus,   Jan.   23,   1868. 

161.  Folwell,  Minnesota,   p.   327. 

162.  General   laws,    1868,  ch.    lOS. 

163.  Edgerton,   op.   cit.,   p.   44. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  41 

legislature,  in  which  lie  discussed  tlic  Minnesota  State  Ixailroad 
Bonds  at  length  and  urged  the  -wisdom  and  propriety  of  meet- 
ing an  obligation  which  Avould  have  to  be  met  sooner  or  later. 
A  number  of  memorials  from  aggrieved  bondholders  were  pre- 
sented to  the  legislature.  These  demanded  settlement  on  vari- 
ous pleas.  One  stated  that  he,  a  resident  of  New  York,  had 
been  induced  by  the  governor  of  JMinnesota  personally  to  pur- 
chase the  bonds  held  by  him.^*^*  Several  New  York  bankers 
claimed  to  be  innocent  holders  and  demanded,  the  protection 
of  the  state  against  the  acts  of  her  own  officers  appointed  l)y 
herself.^"^  Another  memorial  was  presented  by  an  executor 
in  New  York  in  behalf  of  a  deceased  bondholder's  widow  and 
orphans.^^® 

The  state  press  was  in  favor  of  Governor  Marshall's  recom- 
mendation. The  St.  Paul  Press  claimed  that  only  two  news- 
papers in  the  state  opposed  him.^®^  The  legislature  proceeded 
to  enact  what  became  known  as  the  Delano  bill.  This  bill  gave 
j\Ir.  Delano  thirteen  years  in  which  to  buy  up  the  disputed 
bonds  at  practically  his  own  price,  in  return  for  which  he  was 
to  receive  the  entire  internal  improvement  land  grant.  He 
was  in  no  way  made  responsible  for  carrying  out  his  trust,  nor 
for  the  manner  in  which  it  w-as  done.^^^  This  measure  was  not 
at  all  satisfactory  to  the  governor  and  he  promptly  vetoed  it. 

In  1870  the  legislature  passed  another  bill  to  bring  about  a 
settlement.  This  bill  provided  for  the  surrender  of  all  out- 
standing railroad  bonds  with  attached  coupons  in  exchange 
at  par  value,  but  with  no  interest  allowed,  for  internal  im- 
provement lands  at  prices  to  be  determined  at  public  auction 
in  St.  Paul  the  following  September.  The  lands  were  to  be 
exempt  from  taxation  for  a  period  of  ten  years,  but  the  mini- 
nuim  price  Avas  fixed  at  $8.70  per  acre,^**^  which  Avas  several 


164.  The  St.  Paul  Daily  Pres.s,  Feb.   2,   1869,   p.   2;  Memorial   of  .1.   D. 
Souter,   New  York,   Jan.   13,   1869. 

165.  Ibid.,   memorial   addre.ssed    to    the   governor   and    dated    Jan.    19, 
1869. 

166.  Ibid.,  dated  Jan.  25,  1869. 

167.  Ibid.,   Feb.    9,    1869.      The    papers    referred    to    are    the    Hastings 
Gazette  and   St.   Cloud   Journal. 

168.  Ibid.,  March   11,   1869,  p.   1,  and  the  bill  given   in   full,   jip.  2  and 
3-5. 

169.  General  laws,   1870,   ch.   13,   p.   18. 


42  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

times  the  market  value  of  unimproved  land  in  those  regions. 
This  act  was  signed  by  the  governor,  and  was  approved  by 
the  people  at  a  special  election  held  the  following  May;  but 
the  bondholders  did  not  wish  for  settlement  on  these  terms, 
and  the  required  number  of  bonds  were  not  deposited  for  the 
act  to  become  operative. 

In  his  message  to  the  legislature  in  1871,  Governor  iMarshall 
again  urged  the  use  of  the  internal  improvement  lands  "to 
save  the  honor  of  the  state  and  save  the  people  from  taxa- 
tion."^'" Other  plans,  however,  were  more  interesting  to  the 
legislature  at  this  time.  Railroad  companies  had  long  looked 
with  longing  eyes  on  this  desirable  land  grant,  and  the  people 
in  frontier  settlements  were  clamoring  for  its  distribution  in 
aid  of  new  railroad  projects.  The  Sauk  Rapids  Sentinel  ex- 
pressed the  sentiments  of  many  when  it  said:  "We  sincerely 
hope  our  legislature  will  this  winter  finally  dispose  of  these 
lands  and  thereby  get  rid  of  a  matter  which  has  become  almost 
as  annoying  and  vexatious  as  the  bonded  debt  itself.  Divide 
up  the  land,  gentlemen,  as  quickly  as  possible,  but  don't  forget 
to  give  us  a  share  up  this  way. "^"^ 

A  number  of  such  division  schemes  were  proposed  and  met 
with  no  particular  objection  in  the  press.  After  much  log-roll- 
ing and  lobbying,  a  bill  was  finally  passed  which  divided  all 
the  lands  among  several  railroad  companies.  The  bill  in  its 
final  form  was  rushed  through  without  a  hitch  and  received 
the  support  of  men  of  both  political  parties.  The  fate  of  the 
internal  improvement  lands  seemed  settled,  when  the  unex- 
pected happened,  the  governor  vetoed  the  bill.  He  gave  as  his 
reasons  that  the  bill  did  not  have  the  free  and  voluntary  con- 
sent of  the  majority  of  both  Houses  of  the  legislature,  and 
that  they  were  not  authorized  to  dispose  of  the  lands  in  this 
manner. 

The  veto  came  as  a  surprise  to  the  members  of  the  legis- 
lature as  well  as  to  the  people.  It  met  with  various  receptions 
in  different  parts  of  the  state.  Rochester,  though  in  the  anti- 
monopoly  storm  center,  felt  keenly  disappointed.  The  Federal 
Union,  a  Rochester  paper,  said :    "This  is  sad  news,  and  it  will 


170.  Minn.    Exec.   Docs.,    1870.   p.    7. 

171.  Sauk  Rapids  Sentinel,  Jan.  27,   1871. 


RAILROAD  LIOOISLATION  IN  MINNESOTA. 


43 


tend  to  retard  greatly  the  prosperity  of  this  portion  of  the 
state.  This  is  confirmed  by  the  St.  Paul  papers."'"-  The 
Rochester  Post  commented:  "St.  Peter  glorified  and  jollified 
over  Governor  Austin's  veto  of  the  land  division  bill  with 
bonfires,  cannon  firing,  and  band  playing.  Rochester  did  none 
of  these  things.  St.  Peter  was  not  a  point  in  the  land  divide. 
Rochester  was  a  point  in  the  land  divide.  This  makes  a  great 
difference  between  St.  Peter  and  Rochester."^"  In  an  edi- 
torial of  the  same  issue,  however,  was  stated:  "While  we  in 
this  vicinity,  as  residents  of  a  locality  Avhich  the  bill  proposed 
to  benefit,  may  regret  the  loss  of  the  new  roads  which  were 
promised  through  its  operation,  we  cannot  but  respect  the  gov- 
ernor for  his  action." 

On  the  Avhole,  Governor  Austin  received  the  hearty  sup- 
port of  the  press,  and  he  gained  the  respect  of  the  people  for 
his  high  motives  and  fearless  action.'^'  Politicians  and  those 
personally  interested  in  the  "land  grab"  swore  vengeance  and 
tried  to  bring  about  his  political  destruction.  These  virulent 
attacks  were  promptly  met  in  the  courts  and  the  governor  was 
vindicated.  The  Republican  state  central  committee  issued  a 
circular  in  defence  of  the  governor,  and  characterized  the 
work  of  his  enemies  as  an  iniquitous  conspiracy  against  the 
people  of  ^Minnesota.'"''  The  people  had  faith  in  Governor 
Austin,  and  there  was  from  this  time,  as  Professor  Folwell 
says,  no  question  of  his  re-election,  should  he  desire  it.^'" 

The  internal  improvement  lands  continued  to  weigh  heavily 
on  the  hands  of  the  state,  and  the  governor,  fearing  with  good 
reason  that  they  might  be  misapplied,  recommended  to  the  leg- 
islature of  1872  that  they  be  sold  in' the  same  manner  that 
school  lands  were,  and  that  the  proceeds  be  held  as  an  internal 
improvement  fund  subject  only  to  the  vote  of  the  people. ^'^^ 
The  legislature  accordingly  proposed  this  as  an  amendment  to 
the   state    constitution,    providing   further   that    the   proceeds 


172.  Federal  Union,  March   11,   1871. 

173.  Roche.'iter   Post,    March    11,    1871. 

174.  Ibid.,  March  11,  1871  (editorial);  St.  Paul  Dispatch,  March  14, 
1871;  New  York  Times  editorial  qvioted  in  St.  Paul  Dispatch, 
March   14,   1871. 

175.  Published  in  Minneapolis  Tribune,  Nov.   3,   1871,  and  elsewhere. 

176.  Folwell,    Minnesota,    p.    269. 

177.  Exec.  Docs.,   1871,  Governor's  Message,  Jan.,   1872. 


44  MINNESOTA    HISTOIIICAL    SOCIETY    COLLECTIONS. 

from  these  land  sales  were  to  be  invested  in  United  States 
bonds  or  in  IMinnesota  State  bonds  issued  since  1860.''^  This 
constitutional  amendment,  which  was  ratified  at  the  next  gen- 
eral election,''"  made  any  adjustment  of  the  railroad  bonds  in 
the  near  future  highly  improba])]e.  The  people  would  not  sub- 
mit to  taxation  to  pay  tlu'  repudiated  bonds,  nor  were  they 
very  likely  to  vote  for  the  applicnliou  of  the  internal  improve- 
ment fund  to  this  purpose. 

The  bondholders  Avcrc  unable  to  pursue  any  remedies  at 
law  against  the  state  on  her  bonds,  and  when  it  became  appar- 
ent that  no  legislative  relief  was  forthcoming,  IMr.  Cham])er- 
lain,  who  held  state  railroad  bonds  amounting  to  over  half  a 
million  dollars,  which  he  had  received  for  construction  work 
from  the  Southern  IMinnesota,  ])rought  suit  against  its  succes- 
sors, the  St.  Paul  and  Sioux  City  and  the  Southern  IMinnesota 
railroad  companies,  seeking  to  charge  with  the  payment  of  the 
bonds  the  two  hundred  and  fort,y  sections  mortgaged  by  the 
original  company  under  the  amendment  of  1858  and  purchased 
by  the  state  under  tlie  foreclosure  of  this  mortgage  and  now 
held  by  the  defendant  railroad  companies.  He  contended  that 
the  position  of  the  state  in  relation  to  the  bonds  was  simply 
that  of  a  surety,  the  principal  debtor  ])eing  the  original  South- 
ern Minnesota  railroad  company,  whose  president  had  endorsed 
and  transferred  to  him  the  bonds,  and  that  therefore  the  con- 
veyance by  that  company  of  its  land  grant  to  the  state  to  in- 
demnify the  state  created  a  trust  in  favor  of  the  holder  of  the 
bonds.  His  claims  were  not  sustained  in  the  federal  circuit 
court,  and  the  supreme  court  likewise  in  its  October  session 
in  1875  held  that  the  bondholders  had  no  equitj''  for  the  appli- 
cation of  the  land  to  payment  of  their  bonds.'^'*  As  to  the 
validity  of  the  bonds  themselves.  Justice  Field  in  his  state- 
ment of  the  case  said:  "The  bonds  issued  are  legal  obliga- 
tions. The  state  is  bound  by  every  consideration  of  honor  and 
good  faith  to  pay  them.  "Were  she  amenable  to  the  ti'ibunals 
of  the  country  as  private  individuals  are,  no  court  of  justice 


178.  General   laws,    1872,   ch.    14. 

179.  Exec.  Docs.,  1872,  Governor's  Message,  Jan.,   1873. 

180.  92   Otto,   299,   Chambirlain   v.   St.   Paul   and   Sioux   City   Railroad 
Company    et  al. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  45 

would  witliliold  its  judgment  against  Ik'I'  in  an  action  for  their 
enforcement."  ^^^ 

The  supreme  court  iiad  earlier  in  tlie  same  session  reviewed 
the  claims  of  ]\lr.  Farnsworth  and  otliei-s  against  the  8t.  Paul 
and  Pacific  for  the  payment  of  bonds  IssucmI  hy  its  defaulted 
predecessor,  the  Minnesota  and  Pacific.'*-  It  Avas  lu'ld  that  tiie 
original  company  liad  foi-fciled  its  franchises  and  all  interest 
in  the  land  gi-ant.  and  that  its  successor  had  secured  title  free 
from  any  lien.  Tlie  right  of  the  state  to  foreclose  the  trust- 
deeds  Avas  sustained,  but  oJ)iter  dicta  it  was  said  tliat  the  adop- 
tion of  the  constitutional  amendment  of  November,  1860,  cer- 
tainly had  the  effect  to  impair  tlie  value  of  the  bonds  of  the 
state,  and  that  the  holders  of  the  bonds  were  injuriously  af- 
fected hy  the  amendnuuit.'^''  Such  statements,  coming  from 
the  highest  judicial  tribunal  of  the  nation,  were  far  from  grat- 
ifying to  those  who  took  a  pi'ide  ill  the  good  name  of  the  state 
of  Minnesota. 

Governor  Davis,  in  his  parting  messagi^  to  the  legislature 
in  January,  1876,  diseussed  at  length  the  history  of  the  bonds 
and  tlie  moral  obligations  of  the  state,  and  strongly  recom- 
mended the  ai)pointment  of  an  impartial  commission  to  adjust 
the  claims.''^*  Governor  Pillsbury,  in  his  inaugural  address  to 
the  same  legislature,  likewise  devoted  much  time  to  the  same 
question.^*''  He  believed  that  the  bond  issue  was  i)remature 
and  unwise,  but  since  the  state  had  in  I860  obtained  by  fore- 
closure the  security  for  the  l)onds,  he  tliouglit  it  evinced  a 
childish,  ignoble  disposition  to  repudiate  the  results  of  an  act 
of  folly  deliberately  committed  by  themselves.  The  earnest 
pleas  for  the  vindication  of  the  honor  of  .the  state  were  of  little 
avail,  except  to  keep  up  the  agitation  in  the  legislature  and 
throughout  the  state. 

The  next  year  Govei-nor  Pillsbury  again  took  u[)  the  (lues- 
tion  for  discussion  in  liis  message  and  aftii-med  the  validitv  of 


181.  Ibid.,   p.   304. 

182.  92     Otto,    49,    Farnsworth     et     al.,    trustees,    v.    Minnesota     and 
Pacific    Railroad   Company    et    al. 

183.  Ibid.,  p.   71. 

184.  Exec,    Docs.,    1875,    vol.    I,    p.    35    ff.;   Gov.   Davis'    message,   Jan., 
1876. 

185.  Ibid.,   Inaugural  address  of  Gov.   PiUsbury,   .Jan.,    1876, 


46  MINNESOTA   HISTOIIICAL.   SOCIETY    COLLECTIONS. 

the  "dislioiiored  bonds"  in  no  uncertain  language.'^*  Tliis 
year  the  legislature  passed  an  act  constituting  the  governor, 
the  secretary  of  state,  and  the  attorney  general,  commissioners 
of  the  public  debt  of  ^linnesota.  Tliese  commissioners  Avere 
authorized  to  prepare  Minnesota  six  per  cent  thirty-year  bonds, 
redeemal)le  after  twenty  years,  and  to  issue  these  at  the  rate 
of  $1,750  for  each  outstanding  state  railroad  bond  with  cou- 
pons attached.  The  judgments  against  the  Minneapolis  and 
Cedar  Valley  railroad  company  for  construction  work,  Avhieh 
the  legislature  in  1867  had  recognized, ^^^  were  to  be  liquidated 
as  though  state  railroad  bonds  had  been  issued.^^^  This  act 
was  passed  in  pursuance  to  an  understanding  with  ]\lr.  Cliam- 
berlain  and  other  bondholders,  and  was  considered  ecjuitable 
by  them.'*'^  An  amendment  to  the  state  constitution  was  pro- 
posed, which  was  to  authorize  the  legislature  at  its  discretion 
to  apply  the  internal  improvement  lands  and  the  proceeds  from 
them  to  the  redemption  of  the  principal  of  the  bonds  that 
might  be  issued  in  settlement  of  tlie  Minnesota  state  railroad 
bonds.^^°  AVhen  these  measures  came  before  the  electors  of  the 
state  they  were  rejected  by  a  large  majority.  The  time  for  ad- 
justment had  not  yet  come. 

The  governor  in  his  next  message  deplored  the  rejection  of 
what  he  believed  to  be  liberal  terms  wliich  the  bondholders 
had  offered,  and  again  made  his  recommendations  under  the 
heading,  "Dishonored  Bonds."  The  legislature*  at  this  ses- 
sion (1878)  proposed  to  excliange  the  internal  improvement 
lands  for  the  "outstanding  documents  known  as  the  ]\Iinne- 
sota  state  railroad  bonds,  the  validity  of  which  the  people  of 
IMinnesota  do  not  recognize,  but  which  it  is  desira])le  to  be  re- 
covered and  destroyed. "  ^^'  All  bondholders  depositing  their 
bonds  before  the  first  ^Monday  in  July,  1879,  were  to  have,  as 
far  as  possible,  an  equal  eliance.  The  choice  of  land  was  to  be 
given  in  the  order  of  the  deposit  of  the  bonds  after  that  date.^^- 


186.  Exec.  (Iocs.,   1876,  Governor's  message,  Jan.,   1877. 

187.  Special   laws,   1867,   ch.   152. 

188.  General  laws   1877,   ch.   92,  sec.   6. 

189.  Ibid.,   introduction   to   enactment. 

190.  General    laws,    1S77,    ch.    5;    proposed    amend,    to    Art.    IV,    sec. 
32,   B. 

191.  General  laws,   1878,  ch.   85;   introduction    to  enaclment. 

192.  Ibid.,  ch.   85. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  47 

This  measure  fared  no  better  at  the  polls  than  did  those  of  the 
year  before. 

Governor  Pillsbury  continued  his  pleas  for  the  vindication 
of  the  honor  of  the  state  and  for  the  redemption  of  the  "dis- 
honored bonds"  in  his  messages  to  the  legislatures  in  1879 
and  1881,  the  sessions  at  this  time  having  been  made  biennial. 
The  bondholders  were  getting  impatient,  and  Mr.  Chaml)erlain 
and  others  again  proposed  a  compromise.  It  was  realized  that 
no  settlement  could  be  made  which  the  people  would  accept. 
In  1881  the  legislature  authorized  and  required  the  judges  of 
the  state  supreme  court  to  determine  the  constitutionality  of 
issuing  bonds  to  settle  the  vexatious  claims  without  submit- 
ting the  question  to  the  vote  of  the  people  as  required  by  the 
amendment  of  1800.  In  case  any  of  the  judges  of  the  supreme 
court  did  not  qualify  to  serve,  the  governor  was  authorized  to 
appoint  district  judges  to  fill  such  vacancies.  If  this  tribunal 
decided  that  submission  to  the  people  was  not  necessary,  new 
bonds  were  to  be  issued  immediately  to  pay  fifty  per  cent  of 
the  principal  and  interest  of  all  outstanding  claims,  connected 
with  the  defaulting  land  grant  companies  in  which  the  state 
had  an  interest;  otherAvise  the  act  was  to  be  submitted  to  the 
electors.  The  governor,  auditor,  and  attorney  general,  were 
designated  a  board  of  commissioners  to  carry  out  the  provi- 
sions of  the  act.^^^  Another  act  was  passed,  providing  that 
the  proceeds  from  the  internal  improvement  lands  were  to  be 
applied  to  the  payment  of  interest  on  the  proposed  INIinnesota 
state  adjustment  bonds  and  to  form  a  sinking  fund  for  their 
payment  at  maturity.  According  to  the  constitutional  amend- 
ment of  1873,  this  act  was  to  be  submitted  to  the  vote  of  the 
electors.^^* 

The  judges  of  the  supreme  court  refused  to  serve,  and  the 
governor  accordingly  appointed  five  district  judges  to  con- 
stitute the  tribunal.  A  writ  of  prohibition  was  served  upon 
them,  and  when  the  case  came  before  the  supreme  court  the 
attorney  general  argued  that  the  legislature  did  not  have  the 
authority  to  set  up  this  tribunal,  and  that  the  act  was  repug- 


193.  General  laws,   1874,  ch.   104. 

194.  92  Otto,  49  and  299. 


48  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

nant  to  tlic  amendment  of  1860.  The  supreme  court  decided  ^'^ 
tluit  tlie  amendment  of  1860  Avas  repugnant  to  the  constitution 
of  the  United  States,  because  it  "impaired  the  obligation  of 
contracts, "  ^^*  and  further,  that  the  act  of  the  legislature  dele- 
gating legislative  power  to  state  judges  was  also  void.  The 
federal  supreme  court  had  already  expressed  itself,  obiter 
dicta,   to  the  same  effect  ^°*  and  the  case  was  not  appealed. 

The  "dishonored  bonds"  could  now  be  redeemed  without 
the  support  of  a  popular  vote.  Governor  Pillsbury  immedi- 
ately called  an  extra  legislative  session  in  October,  1881.  An 
act  was  passed  providing  for  the  issue  of  iMinnesota  state  ad- 
justment bonds  which  were  to  replace  the  former  bonds  and 
claims  at  fifty  cents  on  the  dollar,  as  had  been  agreed  to  by  the 
claimants.^ ^^  An  internal  improvement  land  fund  bill  was 
passed,  which  was  virtually  that  of  the  previous  regular  ses- 
sion re-enacted. ^^^  Tlie  title  was  changed  from  "An  act  for 
the  adjustment  of  Minnesota  state  railroad  bonds"  to  "An  act 
providing  for  the  adjustment  of  certain  alleged  claims  against 
the  state."  This  change  was  perhaps  intended  to  make  it  more 
palatable  to  the  people  when  they  came  to  vote  on  its  adop- 
tion. The  act  was  submitted  to  the  electors  and  Avas  ratified. 
The  issue  of  adjustment  l)onds  having  been  voted  by  the  leg- 
islature, they  chose  to  meet  the  obligations  of  these  new  bonds 
with  the  proceeds  of  tlie  internal  improvement  lands  rather 
than  submit  to  taxation. 

The  adjustment  bonds  were  to  be  prepared  by  the  governor 
and  auditor  and  dated  January  1,  1881.  They  Avere  thirty-year 
bonds  bearing  five  per  cent  interest  after  January  1,  1884,  and 
were  payable  at  the  option  of  the  state  after  ten  years.  The 
state,  however,  reserved  the  right  to  pay  cash  on  selling  the 
bonds  if  it  could  secure  money  at  less  than  five  per  cent  in- 
terest.^^* 

A  Avrit  of  injunction  was  served  upon  the  governor,  re- 
straining him  from  signing  or  issuing  the  adjustment  bonds. 
He  disregarded  the  Avrit,  however,  and  the  bonds  were  duly 


195.  29  Minn.,   474;  State  vs.  Young,  decided   September  9,   1881. 

196.  General   laws,  188],   special   session,   cli.    1. 

197.  Ibid.,   eh.   71. 

198.  General   laws,  1881,   si)ecial  session,  eh.   1,   sec.   2. 


RAILROAD  LEai^!LATl()N   JX   MlXXl'JSc  )TA.  49 

signed,  countersignecl,  and  dcliNcrcd.  When  tlii'  state  treas- 
urer, ]\Ir.  Kittelson,  was  about  to  pay  interest  on  the  new 
bonds,  an  action  was  l)rong!it  in  the  Hennepin  Connty  district 
court  to  restrain  him  from  doing  so,  on  the  ground  tliat  the 
constitutional  amendment  of  1858  authorizing  tlie  issue  of  the 
original  state  railroad  l)onds  was  void,  that  the  act  of  1881 
authorizing  the  issue  of  the  new  l)onds  was  void,  and,  further, 
that  the  new  bonds  had  l)e(>n  signed  and  issued  in  violation 
of  a  writ  of  .injunction.  Tlie  district  court  denied  the  petition 
and  was  sustained  by  the  supreme  court,  which  decided  against 
the  plaintift*  on  all  points.' ^^ 

No  further  legal  difficulty  was  encountered.  The  credit  of 
the  state  was  good,  and  by  November  30,  1882,  new  l)onds  at 
four  and  a  half  per  cent  could  be  issued  to  retire  the  adjust- 
ment bonds.-""  After  a  long  struggle  and  much  difficulty,  ad- 
justment was  tluis  finally  substituted  for  repudiation,  much  to 
the  satisfaction  of  Governor  Pillsbury. 

CHAPTER  V. 
THE  LAND  GRANT  RAILROADS,   1861-1864. 

The  legislature  Avhich  met  in  January,  1861,  was  nominally 
free  to  carry  out  any  policy  that  might  be  deemed  conducive 
to  early  railroad  construction  and  favoraV)le  to  the  interests  of 
the  state.  The  land  grant  companies,  of  wliicli  the  state 
through  foreclosure  and  purchase  now  had  possession,  repre- 
sented the  more. important  projected  railioads;  and  in  connec- 
tion with  them  were  the  immense  federal  land  grants  whicli 
would  accrue  as  fast  as  the  railroads  were  built.  Railroad 
construction  so  heavily  subsidized  ought  to  be  assured  of  suc- 
cess if  properly  managed,,  now  tliat  tlie  state  and  nation  were 
recovering  from  the  efi'ects  of  the  panic.  But  there  was  no 
inclination  or  ability  on  the  paj't  of  the  state  to  build  the  roads 
herself.     The  corporate  interests  were  merely  held  temporai-ily 


199.  29  Minn.,  555;  Secombe  v.s.  Kittelson.  (Full  accoimt  of  facts 
g-iven.) 

200.  Eleventh  Census,  Report  on  Wealth,  Debt,'  and  Taxation. 
Part  I,  p.  106;  Account  of  new  is.iiic:  $4,253,000.  See  al.<o 
Tenth  Census   Report,   Vol.   VII,   p.    63  1. 

4 


50  MINNESOTA   HISTORICAL    SOCIETY    COLLECTIONS. 

and  Avitliout  merger  or  extinguishment.^"^  If  construction 
were  delayed,  the  federal  land  grants  would  be  lost,  for  they 
were  contingent  on  the  fulfillment  of  definite  time  require- 
ments. 

Some  immediate  action  was  deemed  necessary  and  the  sim- 
plest course  was  taken.  The  Minnesota  and  Pacific  railroad 
company  was  regranted  freely  its  former  road,  lands,  proper- 
ties, privileges  and  immunities,  free  from  all  liens  and  claims 
held  by  the  state. -''^  The  property  and  franchises  of  the 
other  three  companies  were  likewise  ''continued,  granted  and 
transferred"  to  different  groups  of  persons  named  in  the  en- 
actments.^"^ 

According  to  these  enactments  the  Minneapolis  and  Cedar 
Valley  and  the  Southern  Minnesota  companies  were  to  be  tem- 
porarily favored  with  a  more  lenient  rate  of  taxation.  During 
the  first  three  years  they  were  to  pay  one  per  cent  of  their 
gross  earnings,  the  next  seven  years  two  per  cent,  and  after 
ten  years  the  full  three  per  cent  as  required  in  the  original  en- 
actments of  1857.  These  companies  were,  however,  required  to 
keep  an  accurate  account  of  their  gross  earnings,  and  to  trans- 
mit abstracts  of  these  accounts  certified  under  oath  to  the  state 
treasurer  annually;  and  the  governor,  or  any  other  person  ap- 
pointed by  law,  was  given  plenary  powers  to  ascertain  the 
truth  of  the  affidavits  and  the  correctness  of  the  abstracts.  In 
collecting  her  percentum  the  state  was  given  a  prior  claim 
over  all  other  creditors. 

The  Minnesota  and  Pacific  had  these  restrictive  provisions 
in  its  original  charter  granted  in  1857,-°*  and  did  not  get  the 
benefit  of  the  lower  tax  rate.  The  Transit  also  continued  lia- 
ble to  the  full  three  per  cent  gross  income  tax,  but  was  now 
the  only  land  grant  company  not  subject  to  the  stricter  reg- 
ulations as  to  reports  and  investigation. 

No  mention  was  made  of  the  state  railroad  bonds,  for  they 
had  been  virtually  repudiated  the  year  before.  No  attempt 
was  made  to  bring  the  charter  rights  of  these  companies  into 


201.  So  held  later  in  Ry.  Co.   vs.  Pascher,   14  Minn..   29' 

202.  Special  laws,   1861,   ch.   5. 

203.  Ibid.,   chs.   2,   3,   and   4. 

204.  Session   laws,    1857,   extra   session,   ch.   1,   sec.   18. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  51 

harmony  with  the  provisions  of  the  general  incorporation  law 
enacted  in  1858.  The  main  interest  qnite  apparently  centered 
on  getting  railroad  construction  resumed  and  the  roads  com- 
pleted. The  most  important  condition  which  the  legislature 
in  each  case  imposed  was  that  a  certain  number  of  miles  of 
railroad  must  be  built  within  stated  periods  of  time,  to  entitle 
the  companies  to  the  regrant  of  property  and  franchises.  Each 
company  was  required  to  deposit  $10,000  with  the  governor  as 
a  guarantee  of  good  faith,  to  be  forfeited  if  their  obligations 
were  not  fulfilled. 

Governor  Ramsey  had  i)ointed  out  in  his  message  to  the  leg- 
islature the  importance  to  the  agricultural  interests  of  a  rail- 
road communication  between  the  navigable  waters  of  the  Mis- 
sissippi and  the  head  of  Lake  Superior,  especially  if  in  the 
"precipitate  madness  of  sectional  excitement"  the  free  nav- 
igation of  the  IMississippi  should  be  obstructed.  The  federal 
land  grant  of  1857  had  not  provided  aid  for  such  a  railroad. 
The  governor,  therefore,  recommended  that  this  work  be  aided 
as  far  as  possible  by  favorable  legislation  without  "pecuniary 
involvement"  on  the  part  of  the  state,  and  suggested  the  dona- 
tion of  swamp  lands  along  the  line  of  such  road,  if  it  would 
not  become  a  precedent  Avhich  would  divert  the  remainder  of 
these  lands  from  "other  and  more  legitimate  purposes."-**^ 

The  legislature  accordingly  amended  and  continued  the 
Nebraska  and  Lake  Superior  charter  of  1857  by  giving  a  new 
set  of  incorporators  under  a  new  name,  the  Lake  Superior  and 
]\Iississippi  railroad  company,  a  new  special  charter  which  gave 
this  company  the  state  swamp  lands  for  seven  miles  on  either 
side  of  the  proposed  road.-°^  The  original  had  been  accepted 
by  the  incor])orators,  but,  as  the  corporation  had  not  been  dis- 
solved by  judicial  decree  for  non-user  of  its  charter  rights  and 
non-compliance  with  the  conditions  on  which  these  Avere  grant- 
ed, the  charter  was  technically  operative  -°'  and  as  such  sub- 
ject to  legislative  amendment.  It  v/as  evidently  deemed  ex- 
pedient to  depart  from  the  spirit  if  not  the  letter  of  the  clause 


205.  Exec,   docs.,   1860,   p.    12.     Governor'.s   Message,   .Jan.   9,    1861. 

206.  Special   laws,    1861,   ch.    1;    the  amended  act   was   ch.    9?,   of   1857 
extra  session  laws. 

207.  Records  in   office  of  the  secretary  of  state. 


OZ  MINNESOTA    HISTOIUCAL    SOCIIOTY    COLLECTIONS. 

of  the  constitution  iorbidclini:;  tlic  in('Oi-|)oration  of  other  than 
municipal  incorporations  hy  special  act.-"-  The  legislature 
could  have  ])rouglit  the  Lake  Superior  and  Mississippi  railroad 
company,  as  well  as  tlie  land  grant  companies,  under  the  gen- 
eral railroad  laws,  had  they  so  desired:  but  to  satisfy  the  rail- 
road interests,  and  thereby  to  promote  and  facilitate  an  early 
completion  of  these  very  important  roads,  the  old  regime  of 
special  railroad  legislation  was  continued. 

The  regrant  of  property  and  franchises  of  the  land  grant 
companies  made  in  1861  brought  no  results.  The  people  had 
looked  forward  to  rapid  railroad  construction  to  meet  the  de- 
mand for  improved  transportation  facilities  which  increased 
with  the  rapidly  growing  population,  but  with  the  approach 
of  the  Civil  War  construction  {)lans  had  to  be  postponed.  The 
IMinnesota  and  Pacific  had  to  be  postponed.  The  ^linnesota 
and  Pacific  was  the  only  land  grant  company  that  complied 
with  the  enactments  of  1861  by  paying  the  costs  of  the  fore- 
closure and  depositing  $10,000  as  a  guarantee  of  good  faith. 
But  the  security  and  all  charter  rights  and  privileges  were  for- 
feited because  the  company  failed  to  construct  a  railroad  from 
St.  Paul  to  St.  Anthony,  a  distance  of  ten  miles,  by  January 
1,  1862,  as  recjuired.-"''  The  state  remained  in  possession  of 
the  land  grant  "railroads."  There  was  as  yet  not  one  mile  of 
completed  railroad  in  the  state. 

Governor  Kamsey  recommended  to  the  next  legislature  the 
passage  of  a  general  law  authoi-izing  any  company,  on  making 
a  proper  guarantee  deposit,  to  exercise  the  forfeited  rights  of 
the  defaulted  companies.  Since  there  was  no  ability  on  the 
part  of  the  state  to  construct  these  roads,  and  in  view  of  the 
fact  that  the  grants  would  otherwise  soon  be  lost,  he  believed 
that  no  obstacle  should  be  placed  in  the  way  of  those  whose 
far-seeing  enterprise  might  induce  them  to  undertake  even  a 
small  part  of  these  improvements  immediately.-^" 

The  legislature,  however,  made  another  regrant  of  the  char- 
ter rights  of  the  land  grant  companies  to  different  companies 
as  had  been  done  the  year  before.    An  act  was  passed  creating 


208.  See    'j;!    Wise,    60  1,    and    ca.ses    there   cited. 

209.  Art.    10,   sec.    2. 

210.  Exec,   docs.,    1861,    i».   21;   Governor's   Message,   .Jan.,    1862. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  53 

the  St.  Paul  and  Paeitic  railroad  company.  To  this  company 
was  granted,  free  and  clear  of  all  claims,  all  the  franchises  and 
interests  of  the  ^Minnesota  and  Pacific  whicli  had  been  acquired 
by  tlie  state,  and  also  all  i"iji:hts,  lands  and  property,  granted 
to  the  company  by  the  act  of  May  22,  ISoT.  These  grants  were 
made  on  the  condition  that  certain  parts  of  the  projected  road 
were  completed  within  specified  times.  The  company  was  re- 
quired to  deposit  with  the  governor  .*f;10,000  to  l)e  forfeited  to 
the  state  if  it  failed  to  complete  the  i)ortion  of  its  road  be- 
tween St.  Anthony  and  Anoka  by  January  1,  1864.  The  de- 
posit might  be  made  in  money  or  lionds  of  the  Ignited  States, 
or  of  the  state  of  ^linnesota  or  any  state  of  the  Union  in  good 
credit.-" 

The  charter  and  land  grant  rights  of  the  ^linneapolis  and 
Cedar  Valley  were  vested  in  a  new  group  of  men  and  their  suc- 
cessors, who  were  to  retain  the  old  corporate  name.  This  com- 
pany was  to  deposit  $10,000  as  evidence  of  good  faith,  if  any 
other  nine  men  were  willing  to  deposit  that  amount  as  a  guar- 
antee that  they  would  build  the  railroad  and  comply  with  the 
enactment.-'-  There  is  no  mention  of  deposits- in  the  regrants 
of  the  property  and  franchises  of  the  other  two  land  grant  com- 
panies, the  Root  River  Valley  and  Southern  ^Minnesota  and  the 
Transit.  The  name  of  tlie  latter  company  was  changed  to 
AVinona  and  St.  Peter.-''  The  Root  River  Valley  and  Southern 
Minnesota  enactment  is  interesting,  for  in  this  the  grantees  are 
expressly  created  a  body  corporate  under  the  name  and  style 
of  the  former  company.-'*  In  the  other  enactments,  and  in 
three  of  the  regrants  of  1861,  new  companies  were  evidently 
created,  for  charter  rights  were  given  to  the  grantees,  their 
associates  and  successors.-'" 

The  St.  Paul  and  Pacific  accepted  the  legislative  grant,  and 
immediately  prepared  to  take  up  its  work.  As  a  deposit  it 
offered  $10,000  in  ^Minnesota  state  railroad  bonds,  but  the  gov- 
ernor refused  to  accept   these  lionds  as  good  security.'-""'     In 


211. 

Special  laws,   1862,   ch.   20. 

212. 

Ibid.,  ch.   17. 

212. 

Ibid.,   ch.   19. 

214. 

Ibid.,  ch.   18,   sec.    1. 

215. 

Ibid.,   1861,  chs.   2,   3,  and   4 

216. 

Exec,  docs.,   1862,   p.   22. 

54  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

the  summer  of  1862  ten  miles  of  railroad  were  built  to  con- 
nect St.  Paul  and  St.  Anthony.  The  Winona  and  St.  Peter 
was  organized,  and,  beginning  their  construction  work  at  AVi- 
nona,  the  company  worked  westward.  According  to  Governor 
Ramsey,  it  had  ten  miles  completed,  with  cars  running,  when 
he  sent  in  his  message  to  the  legislature  in  January,  1868.-'^ 

The  other  two  companies  did  not  even  organize,  and  the 
next  legislature,  without  any  further  action,  gave  the  same 
rights  and  privileges  to  new  companies  in  the  hope  that  the 
work  would  be  taken  up.  The  St.  Paul  and  Pacific  was  author- 
ized to  biuld  two  branch  lines,  one  from  some  point  on  its  line 
near  St.  Cloud  to  Duluth,-^*  and  another  from  St.  Paul  to  Wi- 
nona.-'^ In  the  connection  with  the  former  were  congressional 
land  grants;--"  the  latter  was  to  be  subsidized  by  a  grant  of 
all  state  swamp  lands  wnthin  tlie  limits  of  seven  miles  on  either 
side  of  the  branch. 

The  Minneapolis  and  Cedar  Valley  organized  and  began 
its  work.  By  the  close  of  the  year  it  had  connected  ^Mendota 
and  Northfield  by  rail.  The  Winona  and  St.  Peter  extended 
its  line  as  far  as  St.  Charles,  making  a  total  of  twenty-nine 
miles.  The  St.  Paul  and  Pacific  fulfilled  its  ol)ligations  by  com- 
pleting its  line  between  St.  Anthony  and  Anoka.--' 

The  people  were  encouraged  by  the  sight  of  railroad  con- 
struction, but  neither  they  nor  the  companies  were  satisfied 
with  the  slow  rate  of  progress  toward  the  realization  of  their 
great  hopes  for  the  future.  They  were  anxious  to  get  railroads 
to  Lake  Superior,  that  Duluth  might  rival  and  eventually 
eclipse  Chicago.  With  St.  Paul  in  railroad  communication 
with  the  British  northwest,  St.  Anthony  with  Iowa,  "Winona 
connected  with  railroads  in  the  I\Iinnesota  Valley,  and  the 
Minnesota  railroads  a  link  in  the  chain  of  Pacific  and  Atlantic 
railroad  communications,  many  felt  convinced  that  I\Iinnesota 
would  soon  become  the  great  railroad  and  commercial  center 
of  the  United  States.  Governor  Swift  believed  that  the  aid  of 
Congress  and  encouragement  by  the  state  legislature  would 


217.  Ibid.,   p.   22. 

218.  Special   laws,   1863,  ch.   3. 

219.  Ibid.,  ch.   4. 

220.  12   U.   S.   Stat.,    624;   Joint   Resolution   approved   July    12,    1862. 

221.  Exec,  docs.,   1863;  Governor's  Message,  Jan.,   1864. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  55 

be  necessary,  if  Minnesota  were  to  complete  the  work  assigned 
to  her  in  this  continental  program,  and  he  warned  the  legis- 
lature against  ill-advised  economy.--^ 

The  Root  River  Valley  and  Southern  Minnesota  did  not  be- 
gin work  on  its  lines  and  in  1864  its  forfeited  property,  fran- 
chises, and  land  grant  rights,  were  given  to  two  new,  inde- 
pendent companies,  namely,  the  i\Iinnesota  Valley  railroad 
company,  which  was  to  build  its  main  line  from  St.  Paul,  St. 
Anthony,  and  Minneapolis  along  the  Minnesota  river  to  South 
Bend,  and  from  there  on  in  a  southwesterly  direction  to  the 
state  line;  and  the  Southern  Minnesota,  which  was  to  build  a 
railroad  from  La  Crescent  to  Rocliester,  aiyi  a  "branch"  ex- 
tending across  the  state  through  its  southern  tier  of  coun- 
ties.-^^  These  companies  immediately  organized  and  began 
their  work. 

The  name  of  the  Minneapolis  and  Cedar  Valley  was  changed 
to  Minnesota  Central  and  its  "charter"  of  1862  was  amended 
by  materially  changing  one  section  and  adding  nine  new  sec- 
tions.^-* This  left  but  little  intact  of  the  original  charter  of 
1856,  of  which  the  later  acts  were  amendatory. 

To  secure  the  more  speedy  construction  of  the  St.  Paul  and 
Pacific,  this  company  was  permitted  to  form  division  compa- 
nies to  undertake  the  construction  and  management  of  definite 
parts  of  its  rather  indefinite  projected  lines.  This  was  in- 
tended to  attract  foreign  capitalists,  who,  while  they  might 
readily  be  induced  to  finance  railroads  within  tlie  borders  of 
a  rapidly  growing  state,  were  somewhat  reluctant  about  fur- 
nishing capital  to  a  company  planning  to  build  a  railroad  from 
St.  Paul  across  the  great  Western  wilderness  to  the  Pacific. 

The  first  division  of  the  St.  Paul  and  Pacific  railroad  com- 
pany was  accordingly  organized  without  delay,  The  St.  Paul 
and  Pacific  by  contract  gave  this  division  company  its  rights 
and  interests  pertaining  to  the  part  of  its  line  extending  from 
St.  Paul  to  Watab,  and  also  of  the  line  from  St.  Anthony  to 
a  point  between  the  Big  Stone  lake  and  the  mouth  of  the  Sioux 


222.  Ibid.,   1863,   p.  5;   Inaugural  Address. 

223.  Special  Laws,  1864,  Ch.  I,  chs.   1  and   2. 

224.  Special  Laws,   1862,  ch.    17,    which    had   been    "amended    to    read 
as"  sees.  1-14  of  Special  Laws,  1863,  ch.  2. 


56  MINNESOTA    HISTOIUCAI.    S(K'IIOTY    COLI.ICCTIONS.. 

Wood  i-i\('i'.--'  Foreign  ('ai)ilal,  especially  i'roiii  Holland, 
Mowed  fi-eely,  and,  as  later  investigations  showed,  Avas  spent 
freely,  ^lucli  more  money  was  expended  than  honest  con- 
struction, mostly  on  hivel  prairie,  could  demand;'--"  but  rail- 
roads were  being  built,  and  that  was  the  main  consideration 
at  that  time. 

The  organization  of  the  hoklers  of  special  and  prel'erred 
stock,  under  the  name  of  the  First  Division  of  the  St.  Paul  and 
Pacific,  was  formally  recognized  by  the  legislature  in  186(5  ;--^ 
and  a  further  subdivision  was  authorized,  giving  to  the  holders 
of  stock  issued  on  the  line  from  St.  Anthony  westward  an  in- 
dependent corpor/ite  existence  under  the  name  of  the  Great 
AVestern  Railway  of  iMinnesota.--*  By  this  system  of  division 
and  subdivision,  an  indefinite  number  of  corporations  could 
have  come  into  existence,  all  enjoying  special  charter  privi- 
leges and  independent  of  the  general  railroad  laws.  For  the 
purpose  of  financing  construction,  the  tendency  toward  decen- 
tralization was  marked.  The  construction  of  parts  of  the  main 
line  and  of  the  branches  was  generally  contracted  for  sepa- 
rately. When  each  division  thus  built  was  pledged  as  security 
separate  from  the  rest,  it  formed  a  tangible  asset,  and  those 
who  held  bonds  secured  bj^  one  division  were  not  materially 
affected  by  the  issue  of  bonds  secured  by  other  divisions.  On 
the  other  hand,  the  solvency  of  the  company  as  a  whole  would 
not  be  imperiled  through  failure  to  meet  obligations  on  one  of 
its  parts.  In  1864  both  tlie  Southern  ^Minnesota  and  the  Minne- 
sota Valley  Avere  authorized  to  issue  special  stock  on  an.y  part 
of  their  railroad  or  branches,  and  to  pledge  the  net  receipts  of 
the  different  divisions  toward  the  payment  of  dividends  on 
such  special  stock.--"  In  the  case  of  the  St.  Paul  and  Pacific, 
this  idea  of  division  was  carried  to  the  extreme,  in  that  this 
comjjany  under  legislative  sanction  could  virtually  give  to  the 
stockholders  of  each  of  its  divisions  a  separate  corporate  ex- 


225.  See  Special  Law.s.   18C6,  ch.   1,  sec.   1. 

226.  Kxec.    Docs.,    187.3,   p.    T;   Governor   Austin'.s   Me.s.-^aii'e. 

227.  Special  Laws,    1S66,   eli.    1. 

228.  Special   Laws,   1866,  oh.   2. 

22ii.  Special  Laws,  1864,  Ch.  I,  chs.  1  and  2;  (Jcneral  Laws,  1864, 
ch.  55  provides  for  ihe  rcKislry  of  sueli  t)rsani'/,ations  and 
agreements. 


RAILROAD   LKOISLATIOX   TN   MINNKSOTA.  Or 

istence.  This  deccntraliziug  teiuleiu-y,  liowcvcr,  w<is  only  tem- 
porary, its  purpose  being  merely  to  facilitate  railroad  eon- 
striietion.  AVhen  the  railroads  were  built  and  ])ut  into  serv- 
ice, the  tendency  toAvard  consolidation  immediately  began. 

CHAPTER  VT. 

AID  TO  RAILROADS,  1S64-1S70. 

The  national  government  did  not  disappoint  the  state  in  her 
hopes  for  further  aid  in  railroad  construction.  On  May  5,  1864, 
^Minnesota  was  given  five  alternate  sections  on  each  side  of  the 
proposed  line  from  St.  Paul  to  Tjake  Superior.-^"  A  week  later 
four  additional  alternate  sections  per  mile  were  given  to  aid 
the  already  subsidized  line  projected  from  St.  Paul,  St.  An- 
thony and  ^Minneapolis,  south  west  ward  to  the  state  line.-'^^ 
These  grants  were  accepted  by  the  state  legislature  in  1865, 
and  were  given  to  the  Lake  Superior  and  ^Mississippi  -  ■-  and 
the  ^Minnesota  Valley  -"•■  railroad  companies  respectively.  A 
discussion  arose  in  the  state  senate  as  to  whether  the  Lake  Su- 
perior and  ^Mississippi  could  be  given  the  grant.  In  answer  to 
one  of  a  series  of  resolutions  sul)mitted  to  him,  the  attorney 
general  gave  as  his  opinion  that  since  the  amendatory  act  of 
1861,  on  which  the  existing  company  based  its  corporate  rights, 
had  in  fact  created  new  and  distinct  corporate  franchises  in 
aid  of  a  different  enterprise,  to  the  destruction  of  the  original 
franchise,  this  act  Avas  repugnant  to  the  clause  of  the  consti- 
tution prohibiting  the  formation  of  corporations  by  special 
acts.-"*  His  opinion,  however,  was  disregarded  by  the  legis- 
lature, and  the  act  Avas  passed  granting  the  land  and  recogniz- 
ing as  valid  the  amendments  of  1861  and  186o.--''' 

In  ^larch,  1865,  Congress  extended  the  time  for  the  com- 
pletion of  the  railroads  of  the  land  grant  companies,  and  in- 
creased the  land  grants  of  1857  to  ten  sections  per  mile  for 


230.  13  U.   S.   Stat.,   64. 

231.  13  U.  S.  Stat.   74. 

232.  Special  Law.'!,    1865,   ch.   2. 

233.  General  Laws,   186.5.  ch.   15. 

234.  Oplnion.s  of  the  Attorney  General    (Minn.),   1858-1885;   hi.'s  opin- 
ion wa.s  given  Jan.  31,  1865;  the  act  was  approved  Feb.  23,  1865. 

235.  Special  Laws,   1861,  ch.  1;   1863,  ch.  5. 


58  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

each  of  the  railroad  lines  and  branches.-'"  In  the  following 
session  Minnesota  was  given  five  alternate  sections  ])er  mile  on 
each  side  of  the  proposed  line  from  Houston  to  the  western 
state  boundary  in  aid  of  this  road,-'^  and  another  similar  grant 
to  aid  the  construction  of  a  railroad  from  Hastings  to  the  west- 
ern boundary.-'^  The  former  grant  was  given  to  the  South- 
ern iMinnesota.-'^  The  latter  was  given  to  the  Hastings,  Min- 
nesota and  Red  River  of  the  North  railroad  company.-^^  This 
eoriwration  had  been  created  the  previous  year  by  an  act 
amendatory  to  the  charter  of  a  company  of  the  same  name 
granted  by  the  territorial  legislature  in  1857.-"  Tn  all,  about 
twelve  million  acres,-^-  or  very  nearly  one-fourth  of  the  total 
land  area  of  IMinnesota,  was  given  by  the  federal  government 
to  aid  the  construction  of  her  railroads. 

Railroad  Co.  Date  of  Grant.  Amount. 

1st  Div.,  St.  Paul  and  Pac,  Mch.  3, 1857,  and  Mch.  3, 1865.  .1,248,450  acres 

Minn.  Western,  Mch.  3,  1857,  and  Mch.  3,  1865 815,000     " 

Minn.  Central,  Mch.  3,  1857,  and  Mch.  3,  1865 180,000     " 

Winona  and  St.  Peter,  Mch.  3,  1857,  and  Mch.  3,  1865 1,670,000     " 

St.  Paul  and  Sioux  City,  Mch.  3,  1857,  and  May  12,  1865.-1,205,000     " 

Lake  Superior  and  Miss.,  May  5,  1863 862,000     " 

Southern  Minn.,  July  5,  1866 500,000     " 

Hastings  and  Dakota,  July  5,  1866 350,000     " 

St.  Vincent  (St.  P.  and  Pac),  Mch.  3,  1871 1,500,000     " 

Northern  Pacific   (in  Minn.),  July  2,  1864 3,392,000     " 

Besides  these  congressional  land  grants,  there  were  also 
land  grants  made  from  the  state  swamp  lands  held  under  acts 
of  Congress  passed  in  ]851  and  ]860.-^-^  As  we  have  already 
seen,  the  Lake  Superior  and  Mississippi  in  1861  received  a 
grant  of  the  swamp  lands  within  seven  miles  of  each  side  of 
its  railroad.-^*  In  1863  the  St.  Paul  and  Pacific  received  from 
the  state  a  grant  of  all  the  swamp  lands  lying  within  the  limits 
of  seven  miles  on  each  side  of  a  proposed  l)ranch  road  from  St. 
Paul  to  Winona  in  aid  of  this  branch. -^^    In  1865  certain  swamp 

236.  13  U.  S.   Stat.,   526,   act   approved   March   3,    1865. 

237.  14.  U.   S.   Stat.,   87,  act   approved    .July    4.    1866. 

238.  14  U.   S.   Stat.,   87,   act    approved    July    4,    1866. 

239.  Special  Laws,  1867,  ch.  6. 

240.  Ibid.,  ch.   12. 

241.  Session  Laws,  1857,  ch.  39. 

242.  Donaldson,   The   Public  Domain,   Its   History  and   Statistics. 

243.  Acts  approved  Sept.  28,   1851,  and  March  12,   1860. 

244.  Special  Laws,  1861,  ch.  1. 

245.  Special  Laws,   1863,   ch.   4. 


RAILHOAD  LEGISLATION   IN  MINNESOTA.  59 

lands  were  set  apart  and  granted  to  the  Southern  Minnesota 
,and  the  IMinneapolis  and  St.  Cloud  railroad  companies,  to  ac- 
crue at  the  rate  of  four  sections  of  land  for  each  mile  of  cer- 
tain parts  of  their  railroads  completed  within  specified  time 
limits.-*"  In  1864  a  ncAv  group  of  incorporators  had  been  given 
the  charter  of  the  old  ^Minneapolis  and  St.  Cloud  railroad  com- 
pany incorporated  in  1856.-''  Fortunately  the  new  corpora- 
tion did  not  organize  within  six  months  as  required,  for  the  old 
company  had  organized  and  kept  up  its  corporate  existence 
and  was  not  willing  to  see  its  valuable  franchises  turned  over 
to  others.-*^  The  legislature,  therefore,  repealed  the  sections 
of  the  act  of  the  previous  year  which  conflicted  with  the  rights 
of  the  old  corporation. 

The  national  and  state  governments  were  not  the  only 
sources  of  beneficent  aid;  the  local  governments  Avere,  accord- 
ing to  ability,  even  more  liberal.  In  1864  St.  Paul  was  author- 
ized to  provide  for  the  purchase  of  depot  grounds  and  right 
of  way  for  the  use  of  the  Minnesota  Central,^*®  and  the  action 
of  its  city  council  in  voting  the  issue  of  bonds  to  the  amount 
of  $250,000  was  legalized  and  confirmed  by  the  state  legisla- 
ture.-"''' According  to  the  general  statutes  of  1866  it  was  un- 
lawful for  the  corporate  officials  of  any  county,  township,  city, 
town  or  village,  unless  specially  and  expressly  authorized  by 
law,  to  incur  any  liability  for  the  payment  of  either  the  prin- 
cipal or  interest  for  which  it  would  be  necessary  to  levy  more 
than  a  fixed  maximum  rate  during  the  current  year  or  any 
subsequent  year.  The  officials  were  made  personally  liable  for 
all  contracts  made  in  contravention  of  these  provisions.-"'^  This 
practically  meant  that  municipal  aid  to  railroads  could  only 
be  given  by  special  legislative  consent ;  but,  judging  from  the 
increasing  number  of  enactments  from  1866  and  on,  which  au- 
thorized such  aid  by  counties,  towns,  cities  and  villages 
throughout  the  state,  such  consent  must  have  been  readily 
obtained. 


246.  Ibid.,    1865,   chs.    1    and    5. 

247.  Ibid.,   1864.   ch.   5,  amending  Session  Laws,   1856,   ch.   160. 

248.  Ibid.,   1865,  ch.   4,   sec.    1,    summarizes   the   facts   of   the   case. 

249.  Special  Laws,   1864,  ch.   37. 

250.  Ibid.,   ch.   49. 

251.  General  statutes,  1866,  ch.   11,  sees.   78-80. 


60  MIXNKSOTA    IllSTOfMCAI.    SOCIKTY    COLLECTIONS. 

When  a  municipal  bond  issue  was  authorized,  the  legisla- 
ture, as  a  rule,  limited  the  amount  which  might  be  issued  and 
fixed  a  maximum  I'ate  of  interest  and  also  a  certain  time  within 
which  the  bonds  were  to  be  made  payable.  In  each  case  the 
question  of  bond  issue  was  lo  be  rd'cn-cd  to  the  voters  of  the 
territorial  unit  couccnicd,  and  Ihc  bonds  were  not  to  be  deliv- 
ered until  tix'  i-aih-oad  company  bad  fulfilled  its  part  of  the 
agreement.  Taxation  to  meet  the  <)l)li,<iati<)ns  of  the  bonds  Avas 
generally  expi-cssly  authorized,  aiul  the  levy  and  collection  of 
taxes  for  this  i)uri)ose  were  matle  the  duty  of  the  local  officials. 

Beginning  in  18()!),  the  legislature  fre.|uently  fixed  the 
maximum  total  indebtedness  which  might  be  incurred  for  the 
purpose  of  aiding  railroads  as  a  fixed  per  cent  of  the  assessed 
valuation  of  the  taxable  property,  generally  ten  per  cent.  In 
November,  1872,  this  per  cent  Avas  fixed  as  the  maximum  for 
all  counties,  towns,  cities  and  villages  within  the  state,  by  the 
adoption  of  an  amenduuMit  to  the  state  constitution.-"'-  An  act 
of  1871  provided  for  the  registration  of  all  municipal  bonds  at 
the  office  of  the  state  auditor.  The  auditor  was  required  to 
ascertain  annually  the  amount  of  interest  due  and  accrued  on 
such  bonds  in  each  county,  and  to  transmit  statements  of  the 
amount  due  to  each  county  auditor.  The  county  auditor  in 
turn  was  required  to  levy  sufficient  taxes  in  each  of  the  local 
units  to  pay  the  interest  on  its  bonds.  These  taxes  were  to  be 
collected  along  with  the  state  taxes  and  according  to  the  same 
laws.^^^ 

The  different  localities  had  been  willing,  and  many  others 
were  still  willing,  to  vote  almost  any  bonus  demanded  by  the 
railroad  companies;  but  experience  had  already  shown  that 
when  the  burden  began  to  be  felt,  and  when  the  railroads 
failed  to  fulfill  all  their  expectations,  they  were  not  all  willing 
to  meet  their  obligations.  A  centralized  administration  of 
these  taxes  became  necessary  to  insure  their  levy  and  prompt 
collection  and  disbursement. 


252.  General  Laws;,   1872,   ch.    1."^,    ratified    at    the    November    election. 

253.  General  Laws,  1871,  ch.   17. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  61 

CHAPTER  VII. 
ATTEMPTS   AT   RAILROAD   CONTROL,   1861-1870. 

Special  railroad  legislation  occupied  the  attention  of  the 
state  legislature  a  gi-eat  deal  of  the  time  during  the  sixties.  It 
is  evident  that  the  idea  of  legislating  railroads  into  existence 
had  not  yet  been  abandoned.  Land  grants  were  invariably 
given  to  companies  not  under  the  general  railroad  law,  and  as 
long  as  the  legislature  had  federal  and  state  lands  at  its  dis- 
posal;  and  latei",  when  the  time  limits  set  for  the  completion 
of  the  railroads  were  about  to  expire,  it  tried  in  each  instance 
to  drive  the  best  bargain  possible  through  special  legislation. 
At  first  the  main  consideration  was  the  early  completion  of  the 
roads,  but  soon  various  kinds  of  control  and  regulation  became 
common  stipulations.  The  railroad  companies  looked  upon 
their  charters  as  contracts  which  the  state  could  not  materially 
alter  without  their  consent.  They  woidd  accept  or  disregard 
the  legislative  enactments  at  their  pleasure.  If  a  company 
could  not  get  what  it  wanted  from  one  legislature,  it  would 
wait  and  try  to  get  it  from  the  next.  In  the  meantime  the 
demand  for  its  railroad  would  be  constantly  increasing,  and  a 
popular  clamor  would  support  its  demands. 

In  the  year  1862  the  St.  Paul  and  Pacific  built  ten  miles 
of  railroad  and  trains  began  to  run  between  St.  Paul  and  St. 
Anthony.  By  the  end  of  1865,  notwithstanding  the  Civil  War, 
which  had  just  been  concluded,  and  the  Sioux  Indian  mas- 
sacres of  1862,  Avhich  had  cast  gloom  and  discouragement  over 
the  state,  there  Avere  two  hundred  and  ten  miles  of  railroad  in 
Minnesota,  of  which  over  half  had  been  built  in  that  one  year. 
In  the  four  following  years  one  hundred  and  five,  one  hundred 
and  fourteen,  one  hundred  and  thirty-one,  and  two  hinidred 
and  ten  miles,  respectively,  were  built.  The  year  1870  added 
three  hundred  and  twenty-two  and  a  half  miles,  making  a  total 
mileage  of  one  thousand  ninety-tAvo  and  a  half,  Avith  gross  re- 
ceipts amounting  to  nearly  three  million  dollars  in  that  year.-'* 

In  spite  of  the  impatient  struggle  for  railroads  in  evidence 
in  all  parts  of  the  state  before  railroads  were  built,  w'e  find 


254.     Report  of  Railroad  Commissionor.  1S71,  p.    12,  and   table  insert- 
ed opposite  p.   40. 


62 


MINNESOTA    HISTOIIICAI.   SOCIETY    COLLECTIONS. 


that  no  sooner  liad  they  l)e('n  Ijuilt  tluin  an  equally  impatient 
struggle  with  the  railroads  l)egan.  The  railroads  were  charged 
Avith  discriniiuation  and  extortion,  and  the  power  of  the  state 
control  became  a  subject  for  heated  discussion.  Throughout 
the  confusing  mass  of  special  legislation  intended  mainly  to 
facilitate  railroad  construction,  we  find,  strangely  enough,  a 
marked  tendency  toward  state  control. 

The  old  territorial  charters  had,  as  a  rule,  authorized  the 
railroad  companies  to  fix  their  OAvn  rates;  and,  as  we  have  seen, 
a  number  of  these  charters  were  from  time  to  time  revived  and 
continued.  As  long  as  the  different  railroads  remained  inde- 
pendent, it  was  often  difficult  to  get  them  to  make  proper  con- 
nections ;  and,  connections  having  been  made,  each  Avould 
through  its  rate-making  powers  try  to  get  the  lion's  share  of 
the  profit  on  the  joint  traffic.  It  was  not  long  before  some  sort 
of  government  regulation  was  found  to  be  necessary.  In  the 
years  1862-65  the  legislature  in  amending  the  territorial  char- 
ters frequently  inserted  the  provision  that  the  railroads  were 
to  transport  all  passengers  and  freight  delivered  to  them  by 
any  connecting  line  on  the  same  terms  and  at  no  higher  rate 
for  the  same  service  than  was  at  the  time  charged  patrons  liv- 
ing on  their  own  lines,  and  the  connecting  lines  Avere  to  be 
governed  by  the  same  rule.-^' 

From  1866  to  1870  a  number  of  the  special  railroad  laws 
contained  the  provision  that  the  railroad  company  should  be 
bound  to  carry  freight  and  passengers  at  reasonable  rates. 
Two  companies  were  authorized  to  build  branch  roads  condi- 
tional on  compliance  Avith  this  provision.-'^®  Four  enactments 
authorized  the  construction  of  branches  Avith  this  provision 
applicable  to  the  branches.""^  In  two  of  the  revived  charters 
this  provision  Avas  incorporated  as  an  amendment.-"'*  One  com- 
pany Avas  authorized  to  AvithdraAV  a  .^^20,000  guarantee  deposit, 
proAdded  it  submitted  to  this  exaction.-"''-^  The  evident  object 
of  this  provision  Avas  to  make  the  raih'oads  possessing  special 


255.  Special  Laws,   1862,  chs.   17,   19.   20;   1863,  cli.s.   1   and   2;   1864,   ch. 
I,   chs.   1   and   2;   1865,   ch.   2. 

256.  Ibid.,   1866,  chs.  4  and  p. 

257.  Ibid.,  1867,  ch.  18;  1868,  ch.  9;  1890,  chs.  59  and  60. 

258.  Ibid.,  1867,  ch.  11;  1870,  ch.  57. 

259.  Ibid.,  1866,  ch.  6. 


RAILROAD  LEGISLATION   IN  MINNESOTA. 


63 


rate-making  powers  sul)ject  to  the  eoiimion  law  rule  that  coin- 
luou  carriers  may  only  charge  uniform  and  reasonable  rates. 
If  railroads  were  placed  on  the  same  footing  as  other  common 
carriers,  the  question  of  reasonableness  would,  in  the  absence 
of  legislative  enactment,  be  determined  in  court.  The  right 
of  the  legislature  to  fix  rates  for  turnpike,  canal,  and  plank- 
road  companies,  had  been  generally  accepted,  and  maximum 
rates  were  frequently  fixed  in  the  charters.  Until  the  Dart- 
mouth College  decision,'^"  the  state  legislatures  could  estab- 
lish or  change  rates  for  common  carriers  at  any  time.  After 
this  decision  they  would  have  the  same  right  unless  "con- 
tracted away"  in  the  charters.  As  a  result  of  this  series  of 
enactments,  the  principal  lines  of  the  state  were  legally  bound 
to  carry  passengers  and  freight  at  reasonable  rates.  Later  the 
legislature  tried  to  determine  what  the  maximum  of  reason- 
able rates  was. 

In  1866  the  legislature  authorized  the  construction  of  two 
branch  roads,  expressly  reserving  in  each  case  the  right  to 
regulate  the  price  of  freight  and  fare  on  the  proposed  branch. ^^^ 
A  similar  reservation  was  made  in  an  act  authorizing  an  Iowa 
company  to  build  a  railroad  connecting  its  line  in  Iowa  with 
the  ]\Iinnesota  Central  at  Austin,  Minnesota."^-  In  1867  the 
congressional  land  grant  of  the  previous  year  was  given  to  the 
Southern  Minnesota,  "provided,  that  the  legislature  shall  have 
the  right  to  fix  and  regulate  from  time  to  time  the  rates  of 
freight  and  passenger  tariffs  on  said  railway,  or  on  any  branch 
or  division  thereof.  "^^'  A  discussion  arose  in  this  legislature 
as  to  whether  it  had  the  constitutional  power  to  fix  and  reg- 
ulate freight  and  passenger  rates,  and  particularly  whether  the 
exercise  of  such  power  would  be  in  conflict  with  the  judicial 
power.  These  questions  were  referred  to  the  attorney  general, 
who  gave  as  his  opinion  that  "as  the  courts  must  decide  from 
the  evidence  in  each  case  as  it  arises,  whether  such  rates  are 
equal  and  reasonable,  therefore,  legislative  enactment  to  fix  or 
establish  such  rates  specifically  would,  unless  accepted  by  the 


260.  4  Wheaton,  518,  February  Term,  1819. 

261.  Ibid.,   1866,  chs.   7  and   11. 

262.  Ibid.,   1866,  ch.   8. 

263.  Ibid.,   1867,   ch.   6. 


64  MINNESOTA    HISTOIilCAL   SOCIIOTY    COLLECTIONS. 

company,  Ix'  in  derogation  of  tlu'  jiidieia!  powers,  and  of  no 
binding  force  or  validity."-"*  As  a  result  of  tliis  opinion,  no 
more  laws  asserting  the  right  of  the  legislature  to  make  any 
such  regulation  were  passed  for  several  years.  The  offending 
provision  in  the  Southern  Minnesota  enactment  -'"'''  was  imme- 
diately repealed,  and  the  company  announced  in  a  prospectus 
issued  some  time  later  that  the  state  had  "disclaimed  all  right 
to  interfere  by  legislation  with  tlic  rates  of  freight  and  pas- 
sage over  tlie  road,  no  sucli  I'ight  having  been  reserved  by  the 
charter.  "-'■•'' 

The  general  incorporation  law  of  IH.IS  liad  fixed  a  maximum 
rate  of  three  cents  per  passenger  mih%  and  five  cents  per  ton 
mile,  for  companies  organized  under  this  act.  In  the  general 
statutes  of  1866  this  provision  remained  unchanged.  Tlu*  leg- 
islature had  not  succeeded  in  fixing  maximum  rates  for  the 
companies  not  under  the  general  law,  and  the  (piestion  came 
up  for  discussion  why  unaided  railroads  under  tlie  general  law 
should  not  be  allowed  to  charge  as  much  for  tlieir  services  as 
the  companies  Avho  had  been  heavily  subsidized  with  land 
grants.-*''  A  bill  was  introduced  in  the  legislature  of  1869,  the 
object  of  which  was  to  bring  all  the  railroads  of  the  state  un- 
der the  same  general  law  respecting  rates. -'^^  This  bill  was 
defeated,  and  another  bill  passed,  which  authorized  any  rail- 
road company  organized  under  the  general  law  to  charge  such 
reasonable  rate  for  freight  and  passengers  as  might  be  fixed 
by  the  corporation  or  prescribed  by  law.-"'' 

The  territorial  charters  had  in  most  cases  provided  differ- 
ent penalties  for  damaging  or  obstructing  trains,  or  endan- 
gering the  lives  of  passengers,  on  the  dift'erent  railroads.  This 
lack  of  uniformity  was  remedied  by  a  general  law  enacted  in 
1868,  which  was  made  applicable  to  all  the  railroads  of  the 
state.-'"     The  legislature  did  not  find  it  necessary  in  this  case 


264.  Opinions    of   tlie   Attorney    C.cnoral    n858-]881).    pp.    237-8,    Feb. 
20,    1867. 

265.  Special   Laws,    1S67.   ch.   7. 

266.  Prospectus  of  Soulhorn   Minn.   Uailroad   Company,   1869,   p.   10. 

267.  St.   Paul   Daily   Press,    Feb.    18,    186!l,    p.    1,   c.    2. 

268.  Ibid.,    Feb.    14,   186;i. 

269.  General   Laws.   1869,   cb.   78.   sec.   2. 

270.  General   Laws,    1868,   cli.   57. 


_  RAILROAD  LEGISLATION  IN  MINNESOTA.  65 

to  make  an  amendment  to  each  of  the  several  territorial  char- 
ters in  force  at  the  time. 

From  the  first  the  gross  income  tax  was  invariably  asso- 
ciated Avith  federal  land  grants.  This  idea  seems  to  have  orig- 
inated in  Illinois,  in  connection  with  the  Illinois  Central,  the 
pioneer  land  grant  railroad  company.^^^  In  1854  Wisconsin 
made  a  gross  income  tax  of  one  per  cent,  in  lieu  of  all  other 
taxes,  applicable  to  all  her  railroads.-'^-  The  constitution  of 
the  state  of  Minnesota  provided  that  "all  taxes  to  be  raised  in 
this  state  shall  be  as  nearly  equal  as  may  be,  and  all  property 
on  which  taxes  are  to  be  levied  shall  have  a  cash  valuation  and 
be  equalized  and  uniform  throughout  the  state."-"  When 
state  lands  were  given,  no  mention  was  made  of  the  gross  in- 
come tax ;  for  instance,  when  the  Lake  Superior  and  Mississippi 
was  given  state  swamp  lands  in  1861.-"*  But  when  the  same 
company  four  years  later  was  given  a  federal  land  grant,  a 
gross  income  tax  was  imposed  on  the  company  in  lieu  of  all 
other  taxes,  state  and  local. -^^  In  the  former  case  a  gross  in- 
come tax  would  have  been  clearly  unconstitutional,  but  in  the 
latter  the  state,  as  a  trustee  of  the  federal  government,  could 
dispose  of  the  lands  under  such  conditions  as  it  might  see  fit 
to  impose,  being  responsible  only  to  Congress  for  the  manner 
in  which  the  trust  was  executed.  This  form  of  taxation  was 
believed  to  be  less  burdensome  and  vexatious  to  the  railroads, 
especially  in  their  infancy,  and  ultimately  more  advantageous 
and  productive  to  the  state. -^® 

Three  per  cent  was  at  first  the  usual  rate  required ;  but,  as 
an  added  inducement  to  an  early  construction  of  the  projected 
lines,  the  burden  was  temporarily  made  lighter.  By  special 
enactments  in  each  case,  every  company  having  claims  to  fed- 
eral land  grants  was,  by  I860,  required  to  pay  only  one  per 
cent  of  its  gross  receipts  annually  for  the  first  three  years  after 
the  first  thirty  miles  of  railroad  had  been  completed,  two  per 
cent  for  the  next  seven  years,  and  after  ten  years  the  full  three 


271.  Private  Laws  of  lU.,   1851,  p.  61. 

272.  General  Laws   of  Wis.,    1854,   ch.    74. 

273.  Art.  p.,   sec.  1. 

274.  Special   Laws,   1861,   ch.   1. 

275.  Ibid..   1865,  ch.   2;  Land   grant   of  May   5,   1864. 

276.  St.  Paul  vs.  Ry.  Co.,  23  Minn.,   469. 


66  MINNESOTA    HISTORICAL   SOCIETY    COLLECTIONS. 

per  ceiit.  Later  land  grants  contained  similar  provisions.  In 
1870  the  nine  railroad  companies  paying  gross  income  taxes 
paid  according  to  tliis  plan.-^^ 

The  companies  favored  this  form  of  taxation,  for  it  relieved 
them  of  all  local  taxation.  They  seem  to  have  regarded  the 
temporary  reduction  as  a  very  substantial  aid.-^^  Tlie  people 
as  a  rule  were  satisfied  with  this  method  of  taxing  the  rail- 
roads, for,  while  the  companies  were  exempt  from  local  tax- 
ation, the  state  as  a  whole  would  be  benefited  by  this  substan- 
tial source  of  income  to  the  state  treasury. 

In  connection  with  the  collection  of  the  gross  income  tax 
came  a  certain  amount  of  supervision  of  accounts.  This  was 
expressly  provided  for  in  the  enactments.  The  governor,  or 
any  other  person  legally  appointed,  was  given  authority  to 
inspect  the  books  and  papers  of  the  railroad  companies  and  to 
examine  their  officers,  agents  and  servants  under  oath,  to  as- 
certain the  truth  of  their  reports. 

According  to  the  original  enactments  the  land  grants  held 
by  the  railroads  were  exempt  from  taxation  until  sold  and 
conveyed.  Interpreting  this  provision  liberally,  the  railroad 
companies  rented  out  land  on  long  time  leases  and  delayed  in 
formally  conveying  much  land  actually  sold,  thus  witliholding 
such  land  from  the  operation  of  the  tax  laws.  Since  the  rail- 
roads were  not  subject  to  general  law,  the  legislature  tried  to 
remedy  the  evil  by  passing  a  series  of  special  enactments,  pro- 
viding that  land  was  to  be  sold,  conveyed,  or  leased ;  but,  in 
case  of  delinquent  taxes  on  such  land,  the  title  or  interest  of 
the  railroad  company  or  of  any  trustee  or  mortgagee  was  not 
to  be  impaired,  only  the  improvements  and  interests  of  the  pur- 
chaser or  lessee  being  liable  to  forced  sale.-'^  It  Avas  optional 
with  the  companies  in  each  case,  however,  to  accept  these  en- 
actments or  not,  as  they  chose.  The  revived  charters  of  the 
Hastings,  Minnesota  and  Red  River  of  the  North  and  of  the 
]\Iinnesota  Central  also  contain  these  provisions.^®"  The  right 
of  the  state  legislature  to  exempt  the  lands  from  taxation,  con- 
ditioned on  the  payment  of  a  percentage  of  the  annual  gross 

277.  Report  of  the  Railroad  Commission,   1871,   table  opposite  p.   40. 

278.  Prospectus  of  Southern  Minn.   Ry.  Co.,   1865,   p.   9;   1869,   p.   14. 

279.  General  Laws,  1865,  ch.  15;  Special  Laws,  1865.  chs,  5,  7,  8,  9,  10. 

280.  Special  Laws,   1866,  ch.  12,  sec.  19;   1867,  ch.  11,  sec.   19. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  67 

earnings  of  the  companies,  was  not  seriously  (juestioned  for 
over  thirty  years.  The  gross  ineoiiie  tax  itself  was  el  early  rec- 
ognized in  a  constitutional  amendment  ratified  in  1871.-"'' 
AVhen  in  ISD.l  the  state  legislature  tried  to  subject  to  taxation 
the  land  grants  still  held  hy  the  railroads,  this  act,  though  up- 
held by  the  state  supreme  court,  Avas  declared  unconstitutional 
by  the  federal  suprcMue  court  because  it  impaired  the  obliga- 
tion of  contracts  made  by  the  state  with  the  railroad  compa- 
nies.-*- The  state  supreme  court  had  up  to  this  time  (1898) 
consistently  upheld  the  gross  income  tax  and  the  exiMuption 
from  other  forms  of  taxation  of  railroad  franchises  and  prop- 
erty, including  the  land  grants  received  from  the  federal  gov- 
ernment.-*'^ 

In  1871  the  railroad  commissioner  estimated  the  total  land 
grants  to  railroads  in  Minnesota  at  12,222,780  acres,  "an  area 
larger  than  the  whole  of  ^Massachusetts,  Kliode  Island,  Con- 
necticut, and  one-half  of  New"  Hampshire,  embracing  much  of 
the  finest  wheat  land  in  America."-**  Up  to  the  close  of  the 
year  1870  municipal  aid  to  these  railroads  had  been  voted  to 
the  sum  of  $1,751,000,  of  which  $388,000  had  been  received.-^'^ 
In  his  discussion  of  the  aid  given  the  first  division  of  the  St. 
Paul  and  Pacific,  the  commissioner  concludes:  ''It  appears 
then  that  the  public  has  granted  for  its  construction  .$43,452 
per  mile  for  the  length  of  the>  road. " -**'  Other  railroad  com- 
panies had  received,  in  lands  and  municipal  aid,  from  $8,400  to 
$29,000  per  mile,  according  to  his  estimation.-*'  >Six  years  be- 
fore the  Southern  ^Minnesota  railroad  company,  to  which  the 
state  had  given  about  half  of  the  property  and  interests  of  one 
of  the  original  land  grant  companies,  estimated  the  value  of  its 
share  of  the  roadway,  grading  and  I)ridging  of  its  defaulted 
predecessor  at  over  $200,000.    It  valued  fifty  thousand  acres  of 


281.  General   Laws,   1871,   ch.    18. 

282.  Stearns  vs.  Minn.,  179  U.  S.,  223;  reversing  72  Minn.,  200   (1898). 

283.  Ry.  Co.  vs.  Parcher,  14  Minn.,  297;  Minn.  vs.  Ry.  Co.,  21  Minn., 
315  and  472;  Ry.  Co.  vs.  St.  Paul,  21  Minn.,  526;  Ramsey  County 
vs.  Ry.  Co.,  33  Minn.,  537;  Todd  County  vs.  Ry.  Co.,  38  Minn., 
163;  St.  Paul  v.'j.  Ry.  Co.,  39  Minn.,  112;  State  vs.  Luther,  56 
Minn.,   156. 

284.  Report  of  tlie  Railroad   Commissioner,   1871,   p.   12. 

285.  .  Ibid.,   p.   50,   table   10. 

286.  Ibid.,   p.   13. 

287.  Ibid.,  p.  12,  ff. 


68  MINNESOTA    lUSTOUTCAL    SOCIRTY    COLLECTIONS. 

its  retk'i'al  land  grant  at  al)out  $;500,(»(i(l,  and  its  une  hundred 
and  fifty  thousand  acres  of  state  swaiiip  lands  at  ^'•115,000,  Avith 
prospeets  of  iinmediate  increase  and  Ijoth  grants  exempt  from 
taxation  till  sold  ))y  the  company.--'*  These  figures  arc  not 
much  below  those  of  the  railroad  commissioner.  The  people 
had  not  forgotten  these  grants  and  thc}^  naturally  looked  for 
corresponding  benefits. 

The  state  had  heaA'ily  subsidized  llicse  i-ailroads,  and  as  a 
result  9981/j  miles,  out  of  a  total  mileage  of  1,092^1.,  were  oi)er- 
ated  l)y  land  grant  companies,  although  thirty-nine  other  com- 
panies had  been  incorporated  under  the  general  incorporation 
law  during  the  years  1858  to  1870.-**°  AVe  find,  then,  that  over 
ninety  per  cent  of  the  mileage  was  governed  by  special  law 
and  subject  to  an  extra-constitutional  system  of  taxation.  Ac- 
cording to  the  Dartnujuth  College  decision,  these  com[)anies 
were  virtually  beyond  the  control  of  the  state  whose  legisla- 
ture had  originally  created  them. 

The  nuiin  railroad  problem  had  at  first  been  how  to  get  rail- 
roads constructed.  AVlien  the  railroads  actually  began  oi)ei"- 
ation,  new  problems  arose  which  proved  fully  as  difficult. 
Railroads  Avere  being  built  in  advance  of  the  business  needs 
of  the  country,  and  competition  for  larger  shares  of  the  meager 
business  soon  led  to  discrimination.  The  comi)anies  tried  at 
non-competitive  points  to  make  up  for  their  low  rates  at  com- 
petitive points.  Farmers  at  some  places  had  to  haul  their 
wheat  fifteen  or  twenty  miles  beyond  their  nearest  market,  to 
get  the  benefit  of  more  favorable  rates.  Between  certain 
l)oints  freight  charges  Avere  so  high  that  fai'ui  products  and 
merchandise  could  l)e  hauled  more  cheaply  by  team.-'"'  The 
success  of  individual  shii)i)ers.  as  Avell  as  the  prosperity  of 
entire  comnuuiities,  depended  largely  on  the  good  Avill  of  the 
railroad  companies.-''^  In  order  to  secure  elevators  and  proper 
facilities  for  handling  grain  along  their  lines,  some  railroads 
had  guaranteed  to  certain  grain-dealers  special  reduced  rates 
and  rebates.     This  resulted  in  a  virtual  monopoly  of  the  local 


288.  ProspectiKS  of  Southern  Minnesota  Railroad  Company,  1S65,  p.  5. 

289.  Report   of  the   Railroad   Commissioner,    1871;   see  list   in   appen- 
dix,  p.   93,    ff. 

290.  Ibid.,    p.    17. 

291.  Stickney,   the  Railway   Problem,  eh.   4. 


RAILROAD  LL:GISLAT10N   IN   MINNESOTA.  69 

grain  markots,  and  frequently  led  to  gross  abuses  wliieli  the 
state  had  no  power  to  i-eniedy  under  the  existing  intei'i)retation 
of  the  law.  Other  railroad  eonipanies  had  built  tlieir  own  ele- 
vators and  bought  the  grain  themselves.  Competitors  were 
generally  denied  aeeess  to  the  railroads,  and  those  who  se- 
cured access  Avere  unable  to  compete  because  of  the  higher 
rates  charged  them.  AVhen  farmers  decided  to  ship  the  grain 
themselves,  they  almost  universally  found  it  an  unprofitable 
undertaking.-^-  Loud  and  fre(iuent  complaints  of  extortion, 
and  of  unjust  and  burdensome  discrimination,  were  heard 
along  the  different  lines  right  from  the  start.  The  farmers 
especially  believed  themselves  to  be  at  the  mercy  of  the  "cor- 
porations." The  situation  Avas  all  the  more  exasperating  be- 
cause the  railroads  operating  at  the  time  had  been  so  heavily 
subsidized  by  the  state.  In  1865  the  directors  of  a  land  grant 
company  had  looked  upon  their  enterprise  as  a  "trust  liberally 
bestowed  upon  them  by  the  state  to  be  carried  out  faithfully 
and  honestly,  but  also  for  the  development  of  the  resources 
of  the  state,  and  as  a  part  of  its  well-devised  system  of  im- 
provements. ' '  -''•*  The  public  in  general  Avas  not  very  Avell  sat- 
isfied Avith  the  manner  in  AAdiich  the  companies  had  carried  out 
their  trusts. 

The  state  had  given  the  railroad  companies  appro])riation 
rights  AA'hich  could  legally  be  exercised  only  for  public  pur- 
poses. These  rights  had  been  freely  made  use  of.  From  this 
it  Avas  argued  that  the  railroads  Avere  public  higliAvays,  and 
that  all  had  an  equal  right  to  their  use.-^*  The  courts  had  held 
the  railroads  to  be  common  carriers.  As  such  they  Avould, 
under  the  common  laAV,  ])e  bound  to  serve  the  public  at  equal 
and  reasona])le  rates  Avithout  discrimination.  This  restriction 
had,  according  to  the  Dartmouth  College  decision,  been  con- 
tracted aAvay  in  the  case  of  the  special  charter  companies.  The 
vested  rights  of  the  companies  Avere  upheld  by  the  courts,  but 
noAV  the  people  l)egan  to  believe  that  they,  too.   had  cci'tain 


292.  Ibid.,   ch.   3. 

293.  Prospectus  of  the  SouthrTn  Minne.'=:ota  Railroafi  Company,  1865, 
p.   12. 

294.  For  instance,  in  a  letter  read  at  tlie  Minn.,  State  Grange, 
June,  1870,  and  ordered  printed  for  circulation.  Q.  H.  Kelley, 
Patrons   of  Husbandry,    pp.    256-2.59. 


70  MINNESOTA    HISTORICAL    SOCIKTY    COLLECTIONS. 

"vested  rights,"  and  they  iiieant  to  assert  them.  This  struggle 
on  the  part  of  the  people  to  maintain  its  common  law  right  of 
control  over  railroads  as  common  cai-rici-s  lias  become  known 
as  the  Granger  ]\Iovement. 


CHAPTER  VTll. 

THiJ  GRANGERS. 

The  Granger  ]Movement  derives  its  name  from  the  Gran- 
gers, a  term  popularly  applied  to  the  Patrons  of  Husbandry,  a 
secret  figricultural  order  whose  lodges  are  known  as  granges. 
The  so-called  granger  or  anti-railroad  movement,  Avhich  re- 
sulted in  restrictive  legislation,  aiming  to  control  railroad  rates, 
in  Illinois,  Iowa,  ^Minnesota,  and  AYisconsin,  was  only  a  com- 
paratively local  manifestation  of  a  general  farmers'  move- 
ment, which  had  for  some  time  been  gaining  momentum  both 
in  this  country  and  in  Europe.  In  the  United  States  the  Na- 
tional Order  of  the  Patrons  of  Husl)andry  proved  one  of  the 
most  efficient  organizations  for  this  general  movement,  which 
resulted  in  a  very  marked  advance  in  the  social,  economic,  and 
political  position  of  the  American  farmer.  The  membership 
of  the  order  had  a  phenomenal  increase  among  the  farmers  of 
the  country  at  the  time  when  the  farmers,  especially  in  the 
middle  west,  were  in  the  midst  of  their  revolt  against  what 
they  termed  railroad  oppression ;  and  the  popular  name  of  the 
members  of  the  order  immediately  became  associated  with  the 
anti-railroad  agitation  in  a  few  states,  rather  than  witli  the 
more  general  movement. 

The  two  decades  preceding  1870  had  been  a  period  of  or- 
ganization among  the  farmer.  Societies  for  the  promotion  of 
agriculture  had  been  organized  in  this  country  as  early  as 
1785,  and  for  many  years  a  number  of  these  societies  did  much 
good  in  encouraging  this  industry  by  holding  fairs  and  award- 
ing prizes  for  the  best  cattle,  sheep,  farm  produce,  and  farm 
implements,  exhibited.  They  also  awarded  prizes  for  essays 
on  agriculture,  and  distributed  these  essays  and  other  agricul- 
tural literature  among  the  farmers.  The  proceedings  of  their 
meetings  were  generally  published  in  the  local  papers,  and  in 


RAILROAD  LRGTST.ATTON  TN   MINNESOTA.  71 

this  way  some  came  to  exert  a  witle  influence.  The  members  of 
these  societies,  however,  Avere  not  tlic  average  farmers  of  the 
community,  but  were  in  the  main  "gentlemen,  merchants,  and 
landowners,"  who  from  philanthropic  and  patriotic  motives 
wished  to  foster  and  develop  the  agriculture  of  the  country.  A 
large  proportion  of  the  farmers  at  the  time  looked  upon  their 
occupation  as  mean  and  servile,  and  comparatively  few  took 
any  pride  in  their  work. 

A  number  of  county  and  state  agricultural  societies  were 
formed  in  the  first  decade  of  the  nineteenth  century;  but  the 
main  incentive  to  an  active  interest  in  such  organizations  came 
in  the  year  1837-8,  when  food  products  had  to  be  imported  to 
the  amount  of  several  million  dollars.  Congress  in  1839  appro- 
priated $1,000  "for  the  collection  of  agricultural  statistics  and 
investigations  for  promoting  agriculture  and  rural  economy 
and  the  procurement  of  cuttings  and  seeds  for  gratuitous  dis- 
tribution among  the  farmers."  This  appropriation  was  made 
at  the  suggestion  of  the  commissioner  of  patents.  After  1847 
appropriations  became  regular  and  were  constantly  increased 
in  amount,  so  as  to  be  more  commensurate  with  the  end  in 
view.  The  first  United  States  Agricultural  Report  was  made 
by  the  patent  office  in  1839.  This  office  through  its  agricul- 
tural division  did  much  for  the  advancement  of  agriculture, 
and  demonstrated  the  need  of  a  separate  department  of  agri- 
culture. 

As  early  as  1811  an  attempt  was  made  to  organize  a  na- 
tional agricultural  society,  but  without  success.  In  1852  twelve 
state  agricultural  societies  called  a  national  convention,  which 
met  at  Washington,  D.  C,  June  14,  1852.  Twenty-three  states 
and  territories  were  represented,  and  the  United  States  Agri- 
cultural Society  was  organized.  This  society  met  annually  at 
Washington,  D.  C,  and  held  successful  agricultural  exhibitions 
in  different  parts  of  the  country  every  year  until  the  outbreak 
of  the  Civil  War. 

In  an  address  published  in  the  agricultural  report  of  1852, 
the  number  of  agricultural  societies  in  the  United  States  was 
said  to  be  three  hundred.-''^     Five  years  later  the  commission- 

295.     Agricultural    Report,    1852.    i>.    22;    Report    of    the   Commi.s.sioner 
of   Patents. 


72  MINNESOTA    HISTORICAL   SOCIETY    COLLECTIONS. 

er  of  patents  named  twenty-one  states  in  wliich  state  agrieul- 
tural  societies  liad  ])een  incorporated,  and  estimated  the  total 
number  of  agricultural  societies  at  eight  hundred.-"^"  Tlie 
commissioner  of  patents,  and  later  the  commissioner  of  agri- 
culture, encouraged  the  formation  of  such  societies  in  every 
part  of  the  country,  and  advocated  a  more  intimate  union  and 
a  more  decided  co-operation  on  their  part  with  the  general 
government  in  the  great  work  of  agricultural  improvement. 
The  government  was  especially  interested  in  efficient  local  or- 
ganizations which  could  furnish  agricultural  statistics.-^^  In 
1867  there  were  1,367  agricultural  societies  recorded  on  the 
books  of  the  department  of  agriculture.  Most  of  the  county 
societies  liad  been  organized  between  1850  and  1860,  wliile  the 
greater  number  of  the  more  numerous  township  societies  and 
farmers'  clubs  had  been  started  after  1860.'-^^  In  some  states 
many  more  were  organized  between  1867  and  1870.-^^' 

The  state,  county,  and  township  societies  were  in  various 
ways  encouraged  and  subsidized  by  the  state  and  national  gov- 
ernments. In  most  cases  their  main  function  seems  to  have 
been  to  hold  annual  fairs  and  exhibits,  or  to  assist  in  such 
undertakings.  These  fairs  were  of  great  educational  value  to 
the  farmers,  and  did  much  to  encourage  invention  and  im- 
proved agricultural  methods.  At  first  the  work  was  unjustly 
criticized  and  ridiculed  by  those  whom  it  was  intended  to  ben- 
efit, but  later  the  farmer  came  to  see  that  he  actually  could 
learn  something  new  about  farming.  But  Avhen  the  farmers 
themselves  became  interested,  they  were  not  content  with  an- 
nual meetings,  fairs  and  exhibitions,  and  the  voluminous  lit- 
erature distributed  among  them.  They  proceeded  to  organize 
farmers'  clubs,  which  met  frequently  for  social  intercourse  and 
mutual  aid  in  solving  practical  every-day  problems.  As  early 
as  1846  the  ^Monthly  Journal  of  Agriculture  published  a  set  of 


296.  Ibid.,    1857,   p.    13. 

297.  Ibid.,  1860,  pp.  20-22;  Report  of  the  Commissioner  of  Agricul- 
ture,  1863,  p.   9. 

298.  Report  of  the  Commissioner  of  Agriculture,  1867,  pp.  364-403. 
List  of  agricultural  societies,  their  officers,  date  of  organiza- 
tion,  etc. 

299.  List  of  agricultural  and  pomological  societies,  farmers'  clubs, 
etc.,  on  the  books  of  the  Department  of  Agriculture,  July  1, 
1870,   47  pp. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  73 

rules  for  tlio  organization  and  govei-nnient  of  farmers'  clubs, 
and  urged  the  fanners  to  unite  and  look  after  their  own  wel- 
fare as  the  other  classes  were  doing."""  Agricultural  papers 
frequently  published  such  constitutions,  and  the  call  to  unite 
became  more  urgent  as  time  went  on  and  the  practicability 
of  such  organizations  became  more  apjiarent.  Most  of  the 
township  organizations  in  the  lists  of  agricultural  societies  pub- 
lished by  the  commissioner  of  agriculture  in  1867  and  in  1870 
were  farmers'  clubs.  This  movement  was  general,  and  we  find 
these  clubs  in  all  parts  of  the  country.  It  was  at  this  time 
that  the  order  of  Patrons  of  Husbandry  ai)peared  on  the  scene 
and  gave  this  general  movement  an  efficient  centralized  organi- 
zation. 

The  idea  of  a  national  agricultural  order  originated  with 
Mr.  Oliver  H.  Kelley,  a  native  of  Boston,  who  moved  to  Min- 
nesota in  1849,  settling  on  a  farm  near  Itasca,  Sherburne 
county.  He  spent  the  winter  of  1864  in  "Washington,  receiv- 
ing a  clerkship  in  the  department  of  agriculture  by  the  friendly 
aid  of  Senator  Ramsey  of  Minnesota.  He  returned  to  Minne- 
sota in  the  spring  of  1865.  On  January  1,  1866,  he  received  a 
commission  as  special  agent  of  the  agricultural  department  to 
investigate  the  agricultural  and  mineral  resources  of  the  South. 
As  a  government  otScial  he  did  not  expect  a  very  friendly  re- 
ception, but,  being  a  freemason  of  good  standing  and  a  man  of 
tact  and  pleasing  address,  he  travelled  through  all  the  states 
east  of  the  Mississippi  without  any  unpleasant  experiences, 
returning  to  Washington,  April  21,  1866.  The  war  had  just 
closed,  and  the  work  of  material  recuperation  had  scarcely 
begun.  ]\Ir.  Kelley  became  convinced  that  there  was  need  of  a 
fraternal  organization  of  all  the  farmers  in  both  North  and 
South,  to  obliterate  sectionalism  and  to  elevate  the  farmers  as 
a  class  to  a  position  of  dignity  and  power.  Agricultural  clubs 
were  numerous,  but  they  were  neither  permanent  nor  effective. 
He  conceived  the  idea  of  a  union  of  agricultural  societies  for 
practical  co-operation  in  the  promotion  of  their  common  inter- 
ests, a  masonry  of  farmers. 

Mr.  Kelley  spent  the  summer  of  1866  at  work  on  his  farm 
in    IMinnesota,    but    returned    to    Washington    in    November. 

300.     Monthly   .Toiirnal   of  Agriculture    (New   York),   vol.   II,   p.   241. 


74  MINNESOTA   IlISTC^IUCAL   SOCIETY    COLLECTIONS. 

Early  in  -Jamiary,  1867,  lie  secured  an  appointment  in  the  post 
office  department.  In  the  summer  of  1867  he  succeeded  in  in- 
teresting a  small  select  group  of  men,  most  of  Avhom  were 
clerks  in  various  departments.'"'^  After  much  work  and  care- 
ful deliberation  they  completed  a  scheme  of  organization,  and 
on  December  4th  they  constituted  themselves  the  National 
Grange  of  the  Patrons  of  Husbandry.  As  modified  the  follow- 
ing January,  the  plan  of  organization  was  as  follows: 

Subordinate  Granges. 
1st  degree,  Laborer  (male)  or  IMaid  (female)  ; 
2nd  degree,  Cultivator  or  Shepherdess; 
3rd  degree,  Harvester  or  Gleaner; 
4th  degree,  Husbandman  or  ]\Iatron. 

State  Grange. 
5th  degree,  Pomona  (Hope).    All  masters  and  past  masters 
of  sul)ordinate  granges  are  entitled  to  this  degree  ex  officio. 

National  Grange. 

6th  degree,  Flora  (Charity).  All  masters  and  past  mas- 
ters of  state  granges  are  ex  officio  entitled  to  this  degree. 
Those  of  the  sixth  degree  constitute  the  national  council  and 
meet  annually. 

7tli  degree,  Ceres  (Faith).  All  who  have  served  one  year 
in  the  national  council  are  eligible  and  on  attaining  the  degree 
become  members  of  the  senate.  All  acts  and  resolutions  origi- 
nate in  the  council,  but  are  subject  to  the  approval  or  rejec- 
tion of  the  senate. 

The  order  was  designed  to  include  on  equal  terms  all  men 
and  women  interested  in  agriculture.  The  first  officers  were 
to  serve  five  years,  so  as  to  secure  the  control  of  the  order  in 
the  hands  of  the  founders  during  its  formative  period.  A  cir- 
cular was  published  in  February,  setting  forth  the  educational 
and  social  advantages  offered  by  the  new  order  which  by  the 
charm  of  secrecy  would  tend  to  insure  permanence.    JNIr.  Kelley 

301.  W.  M.  Ireland,  chief  clerk  in  Finance  Office  of  Post  Office 
Dept.;  Wm.  Saunders,  superintendent  of  the  garden  and 
grounds  of  the  Agricultural  Dept.;  Rev.  A.  B.  Grosh,  clerk  in 
the  Agricultural  Dept.;  Rev.  John  Trimble,  clerk  in  the  Treas- 
ury Dept.;  J.  R.  Thompson,  clerk  in  the  Treasury  Dept.;  F.  M. 
McDowell,  vlneyardist  at  Wayne,  N.  Y. 


RAILROAD  LEGISLATION   IX   MIXXKSOTA.  tO 

had  advocated  tlie  insertioii  of  a  few  words  relative  to  co-oper- 
ation in  protecting  the  nieiiil)ers  from  imposition  and  fraud,  for 
he  was  satisfied  tliat  such  a  feature  woukl  be  necessary  to  make 
the  order  popuhir.  Others,  however,  Avere  of  a  different  opin- 
ion, and  it  Avas  not  incorporated. 

Mr.  Kelley  resigned  his  clerksliip  in  February,  1868,  that 
he  might  devote  his  entire  time  to  the  promotion  of  the  order. 
A  trial  grange  was  organized,  and  the  ritual  was  practiced  and 
perfected ;  and  soon  a  regular  subordinate  grange,  which  was 
given  the  name  Harvest  Grange,  was  established  in  Washing- 
ton. Kelley  now  decided  to  leave  for  Minnesota  to  begin  work 
among  the  farmers  there.  Before  he  left,  the  National  Grange 
met  (six  in  all)  and  authorized  him  to  visit  the  different  states 
to  organize  the  order,  and  generoush^  voted  him  an  annual 
salary  of  two  thousand  dollars  and  necessary  travelling  ex- 
penses, ''the  same  to  be  collected  by  him  from  receipts  from 
subordinate  granges." 

On  April  3,  1868,  Mr.  Kelley  left  Washington,  determined 
to  work  his  way  to  Minnesota  by  organizing  granges.  He  had 
a  remarkable  faitli  in  the  project,  and  believed  that  the  order 
could  and  should  pay  its  own  expenses.  He  attempted  to  or- 
ganize a  grange  in  Harrisburg.  Pennsylvania,  but  did  not  suc- 
ceed. At  Penn  Yan,  N.  Y.,  he  met  with  cheering  words  from 
a  brother  Mason  and  Patron,  Mv.  ]\IeDowell,  who  had  for  some 
time  been  interested  in  tlie  order,  but  he  failed  in  his  attempt 
to  establisli  a  grange.  At  Fredonia,  N.  Y.,  however,  he  met 
with  success,  and  the  first  regularly  organized  grange  of  the 
order  was  there  established.  Mr.  Kelley  next  had  an  agree- 
able visit  with  a  friend  of  tlie  order  in  Spencer,  Ohio,  Mr.  Bart- 
lett,  whom  he  instructed  in  tlie  work  of  organization  and  au- 
thorized to  introduce  the  order  in  that  part  of  the  state.  In 
Chicago  he  found  a  club  ready  to  be  organized  into  a  grange. 
This  was  encouraging  at  the  time,  but  the  grange  did  not  ma- 
terialize. His  next  visit  was  to  ]\Iadison,  AVisconsin,  where  he 
had  hoped  for  much,  but  met  witli  complete  failure.  He 
reached  St.  Paul,  Minn.,  May  1.  On  the  way  from  AVashington 
he  had  received  dispensation  or  charter  fees  at  Harrisliurg. 
Fredonia,  Columbus,  and  Chicago.  He  now  received  by  mail 
an  application  for  a  dispensation  from  Newton,  Iowa,  enclos- 


76  MINNIOSOTA    IlISTomCAI.    SOCIIOTY    COLLECTIONS. 

ing  the  required  fee  of  fifteen  dollars.  Tliese  receipts  paid  the 
expenses  of  his  ti-ip,  ))ut  tli(»  jjrospects  of  the  order  Avere  not 
the  brightest. 

The  fanners  of  Minnesota  were  at  this  time  far  more  in- 
terested in  pi'oteetion  against  middlemen,  corporations  and 
monopolies,  than  in  any  i)lan  for  social  or  educational  improve- 
nu'ut.  They  had  lost  interest  in  the  old  agricultural  societies 
and  were  ready  for  soinelliiiig  new.  The  Fai'mers'  Union,  an 
agricultural  monthly,  which  was  started  in  Minneai)olis  in 
August,  18G7,  with  a  claimed  circulation  of  ten  thousand,  im- 
mediately took  up  tlie  farmers'  cause.  It  i-ecommended  nu)nth- 
ly  township  faii-s,  wIutc  faniuTS  could  mecit  to  buy  and  sell 
to  each  other  directly,  without  the  aid  of  middlemen.'"'-  It 
planned  to  prot(;ct  the  farmer  against  unscrupulous  agents  who 
practiced  fraud  and  deception,  and  urged  all  who  had  been 
swindled  to  give  information.  '•"'■  'j'he  editor,  Mr.  Nimocks,  was 
secretary  of  the  ]\linnesota  Farmers'  JNIutual  Fire  Insurance 
Association,  and  he  made  eflPective  use  of  the  columns  of  his 
paper  in  advertising  the  "P'armers'  Association."  He  gives 
the  following  account  of  its  origin:  "On  the  lilth  of  July, 
1865,  a  number  of  farmers  of  this  state  assembled  at  ^linne- 
apolis  and  organized  a  club  or  association  for  the  purpose  of 
assisting  one  another  Avhen  fires  occur,  or,  in  other  words,  do 
their  own  insuring  and  save  a  large  amount  of  money  and  thus 
avoid  being  swindled  by  irresponsible  insurance  companies. 
.  .  Each  farmer  insured  is  a  member,  and  has  a  voice  in 
its  affairs  and  a  vote  in  the  election  of  ol¥iccrs."  •"'* 

In  November,  1867,  the  Farmers'  Union  began  an  active 
campaign  for  the  organization  of  social  farmers'  clubs.  It 
proposed  to  have  in  the  field  an  able  corps  of  associate  editors 
and  traveling  correspondents,  to  assist  in  the  establishment 
of  such  clubs  in  every  neighborhood  in  the  state  for  the  bene- 
fit of  farmers,  their  wives,  and  families.'""'  This  plan  was  car- 
ried out  during  the  winter,  and,  judging  from  the  letters  from 
farmers'  clubs  in  different  parts  of  the  state,  the  farmers  nuist 
have  taken  considerable  interest  in  tlie  work. 


302.  The    Farmers'    Union,    Aug-..    IStiV    (Vol.    I,    No.    1). 

■.',0?..  Ibid.,   Sept.,    1867. 

304.  Ibid.,   AuR.,   1867. 

305.  Ibid.,   Nov.,   1867;   Jan.,    1868. 


liAILlioAD   I.i:(JI.SLATION    IX   MINNKSOTA.  77 

When  .Mr.  KclU'v,  on  his  I'durn  tVoiii  Wasliinglun  in  May, 
1868,  began  to  work  for  his  orch'r,  the  Farmers'  ITnion  pro- 
nounced his  plan  of  organization  the  most  perfect  that  had  ever 
been  introduced,  and  reeoitnueiKh'd  it  heai'tily  to  tlu;  farmers 
of  tlie  state.  It  continued,  howcxcr,  for  sonic  time  to  work  for 
tlie  establislnnent  of  farmers'  clubs  as  befoi-e.  One  effective 
argument  for  organization  was  the  co-operative  feature,  where- 
by farmers  would  be  enabled  to  purchase  machinery,  nursery 
stock,  groceries,  and  other  necessities,  without  the  expensive 
services  of  retailers  and  connnission  men,  who  frecpiently  were 
guilty  of  charging  exorbitant  prices.  The  success  of  the  Farm- 
ers' Association  in  the  field  of  insurance  was  pointed  out  as  a 
proof  of  the  practicability  of  co-operation,  and  the  farmers 
were  urged  to  apply  this  principle  of  co-operation  in  other 
fields. 

It  is  not  to  be  understood  that  the  Farmers'  I'nion  was  the 
cause  of  this  great  agitation  among  the  farmers  of  Minnesota 
at  this  time.  It  merely  offered  the  fanners  a  fornuda  accord- 
ing to  which  it  was  believed  they  would  be  enal)led  in  a  large 
measure  to  imi)rove  their  condition.  The  tinu's  were  hard  and 
tlie  discontent  was  general  throughout  the  state.  This  discon- 
tent was  due  partly  to  local  conditions  and  i)artly  to  general 
causes.  A  general  movenu'nt  toward  imi)roved  farming  and 
improved  farmers  had  been  in  progress  for  several  decades  in 
this  country  and  in  Europe.  AVhere  any  material  advance  was 
nuide,  a  period  of  social  and  political  re-adjustment,  with  its 
struggle  and  its  discontent,  necessarily  followed. 

The  immediate  causes  for  discontent,  however,  were  more 
concrete.  The  farmers  of  the  state  blamed  the  railroads  and 
the  middlemen  for  the  hard  times,  and  later  they  added  high 
taxes,  high  protective  tariff',  and  bad  currency,  to  their  list  of 
grievances.  Retailers  and  agents,  as  a  rule,  fixed  a  large  mar- 
gin of  profit  on  goods  sold.  This  practice  was  to  some  extent 
justified  by  the  risk  involved,  for  the  farmers  at  that  time 
seldom  paid  cash,  and  many  of  them  were  notoriously  slow 
payers.  Large  profits  on  cash  sales,  and  good  accounts,  made 
up  for  possible  losses  on  doubtful  accounts.  But  wiien  the 
farmers  realized  that  high  prices  were  in  a  large  measure  due 
to  these  large  profits,  they  felt  swindled    and    their    ire  Avas 


78  MINNESOTA    HISTOKICAL   SOCIETV    COLLECTIONS. 

yroused.     I\lany  irresponsible  men  did  swindle  them  outright, 
thus  adding  fuel  to  the  flame. 

With  the  ra])id  extension  of  interstate  railroad  systems,  the 
question  of  railroad  regulation  and  railroad  control  had  al- 
ready in  1868  ceased  to  be  merely  a  matter  of  local  concern: 
In  the  second  session  of  the  fortieth  Congress,  the  committee 
on  roads  and  canals  was  instructed  by  the  House  to  investi- 
gate whether  Congress  had  the  power,  under  the  constitution, 
to  provide  by  law  for  the  regulation  and  control  of  railroads, 
especially  those  extending  through  the  several  states,  so  as  to 
secure,  first,  the  safety  of  the  passengers;  second,  uniform  and 
equitable  rates  of  fare ;  third,  uniform  and  equitable  charges 
for  the  transportation  of  freight ;  fourth,  proper  connections 
with  each  other  in  the  transportation  of  passengers  and  freight ; 
and  if,  in  the  opinion  of  the  committee,  Congress  possessed 
such  powers,  it  was  to  report  a  bill  which  would  secure  these 
objects.^"*'  The  committee  reported  that  in  its  judgment  Con- 
gress had  such  j)ower  over  railroads  connecting  two  or  more 
states,  but  that  it  had  no  constitutional  power  to  legislate  in 
relation  to  railroads  which  do  not  form  parts  of  continuous 
lines  extending  from  one  state  to  another.  The  committee  did 
not  report  any  bill,  for  they  were  not  in  possession  of  much 
necessary  information.'^''^  Two  members  of  the  committee  sub- 
mitted a  vigorous  minority  report.""'' 

The  need  of  railroad  regulation  Avas  general,  but  the  situa- 
tion became  most  acute  in  the  frontier  states  where  imports 
and  exports  had  to  be  transported  great  distances,  and  wdiere 
discrimination  seems  to  have  been  most  flagrant.  Communities 
and  individuals  discriminated  against  could  justly  complain  of 
unreasonable  charges,  and  when  the  railroads  insolently  main- 
tained their  vested  rights  to  fix  charges  to  suit  themselves  the 
people  did  not  find  the  "oppression"  more  tolerable. 

Mr.  Kelley  immediately  began  his  campaign  for  the  new 
order.  Believing  thoroughly  in  publicity,  he  lost  no  time  in 
enlisting  the  services  of  the  press.  The  order  was  advertised 
as  a  national  organization,  making  rapid  progress  in  a  num.ber 

306.  Congres-sional  Globe,   1867-8,  part  .S,   p.   2331. 

307.  40th   Cong.,    2d   Session,   House   of  Representatives,    Report   No. 
47,   pp.   1-8. 

308.  Ibid.,   pp.    8-20. 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


79 


of  states,  and  now  being  introduced  in  IMinnesota  as  a  protec- 
tive organization  -svliicli  would  l)e  of  great  benefit  to  its  mem- 
bers.^"^  Tlie  headquarters  of  the  order  were  in  Washington, 
D.  C,  and  its  nine  officers  were  from  seven  different  states  and 
the  District  of  Columbia. "^^  The  constitution  of  the  order  and 
its  circulars  were  printed  in  the  various  newspapers  of  the 
state.  In  his  monthly  report  to  the  National  Grange,  made 
August  1,  1868,  ]\Ir.  Kelley  says:  "I  can  now  report  to  you 
the  friendly  aid  of  five  agricultural  papers,  whose  columns  are 
open  to  our  cause,  viz. :  The  Prairie  Farmer,  Chicago ;  Farm- 
ers' Chronicle,  Columbus,  Ohio;  Ohio  P^armer,  Cleveland;  Rural 
World,  St.  Louis;  Farmers'  Union,  iMinneapolis.  Besides  these 
the  various  daily  and  weekly  papers  in  the  state  Avill  publish 
any  matter  to  advance  our  interests."-^" 

Mr.  Kelley  availed  himself  of  every  opportunity  to  bring 
the  order  before  the  farmers.  He  attended  a  meeting  of  the 
executive  committee  of  the  State  Agricultural  Society  held  in 
June,  1868,  and  seems  to  have  received  encouragement  from 
its  members. ^^-  He  attended  a  horticultural  fair  in  iMinne- 
apolis the  first  week  in  July  and  met  many  farmers.  In  a  re- 
port of  this  fair  which  he  sent  to  the  Sauk  Rapids  Sentinel,  he 
expresses  his  pleasure  because  of  the  interest  which  the  offi- 
cers of  the  state  and  county  agricultural  societies  in  ^Minnesota 
were  taking  in  the  new  order.  He  optimistically  estimated 
that  according  to  present  prospects  at  least  fifty  granges  would 
be  represented  at  the  coming  State  Fair.^^^  The  editor  of  the 
Sauk  Rapids  Sentinel  congratulated  the  Patrons  upon  the  in- 
crease of  their  number  since  the  first  grange  was  organized  in 
the  state,  and  added:  "They  may  well  feel  encouraged.  The 
order  is  endorsed  by  the  executive  committee  of  our  state  agri- 
cultural society  and  by  all  the  leading  farmers  Avho  have  be- 
come familiar  with  the  order."  -^^^  A  month  later  he  reported: 
"Granges  of  the  Patrons  of  Husbandry  are  springing  up  in  all 


309.  Sauk   Rapid.s    Sentinel,   June   19,    1868. 

.^10.  Ibid.,  June   19,   1868. 

311.  Kelley,   Origin   and   Progress   of   the   Order   of   Patrons   of  Hus- 
bandry  in   the  United  States,   p.    117. 

312.  Ibid.,   I).    110. 

313.  Sauk   Rapids   Sentinel,   July   10,    1868. 

314.  Ibid.,   July    17,    1868. 


80 


MINNIOSOTA    HISTORICAL,   SOCIETY    COLLECTIONS. 


parts  oi'  tlic  stale.  The  rai-iners  are  looking  after  their  inter- 
ests, and  every  town  sliould  havt;  a  l)rancli  of  this  order."  ^^^ 

This  was  no  doubt  wliat  i\Ir.  Kelley  wanted,  but  as  a  matter 
of  fact  tlie  order  was  at  the  time  meeting  a  ratlier  cool  recep- 
tion. The  farmers  Avere  not  ready  to  join  a  secret  society  whose 
objects  and  purposes  they  Avere  not  familiar  with.  The  cir- 
cular did  not  give  them  sufficient  definite  information.  They 
considered  it  too  flowery  and  ambiguous.  They  had  no  need 
of  a  "mutual  admiration  society,"  but  wanted  an  association 
that  would  aid  and  protect  them.''"^ 

In  a  letter  to  the  officers  of  the  National  Grange,  dated 
July  12,  1868,  Mr.  Kelley  writes:  "In  the  country  the  farmers 
ask,  'What  pecuniary  benefit  are  Ave  to  gain  by  supporting 
the  organization?'  Let  the  National  Grange  point  it  out,  let 
it  sliOAV  that  each  Grange  is  of  itself  a  Board  of  Trade,  and  by 
the  system  of  communication  betAveen  subordinate,  state,  and 
National  granges  they  can  market  their  produce  independent 
of  the  Chambers  of  Commerce,  Millers'  and  AVool  (h-oAvers'  As- 
sociations, Avliich  are  gotten  up  to  control  the  market 

Ask  them  this  question,  'Why  not  the  producer  establish  the 
price  of  liis  products  as  Avell  as  the  manufacturer?'  Not  to 
secure  exorbitant  demands,  l)ut  to  get  a  fair  profit  over  the 
cost  of  raising  the  crops.  No  man  can  accumulate  money  Avho 
sells  beloAv  cost.     If  you  hit  this  point  right,  you  Avill  sweep 

the   West ]\Iark   my   Avord,   there   is   a   revolution 

going  on  among  the  ]>eop]e,  and  if  you  strike  the  right  chord 
in  a  ncAv  circular  letter,  you  Avill  soon  see  the  Patrons  Avill  be 
a  poAver,  and  yourselves  at  the  head  of  it.""'^' 

During  the  summer  tAvo  abortive  attempts  had  been  made 
at  establishing  subordinate  granges.  The  first  active  grange 
in  ]\Iinnesota  Avas  the  North  Star  Grange  Avhich  Avas  organized 
in  St.  Paul,  September  2.  Col.  D.  A.  Robertson,  the  leader  in 
this  grange,  immediately  set  to  Avork  and  revised  the  circular 
of  the  order,  Avith  the  hearty  approval  of  jMr.  Kelley.  The  ncAV 
circular  Avas  issued  over  the  signature  of  0.  TI.  Kelley,  Secre- 
tary of  the  National  Grange,  and  under  the  date,  "National 


315.  Ibitl.,   Aus-.    2],    1868. 

316.  Kelley,   op.   cit..   p.    110. 

317.  Ibid.,   pp.    113-111. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  81 

Grange,  Washington,  D.  C,  Sept.,  1868."  According  to  its 
statement,  the  objects  of  the  order  were  to  advance  educa- 
tion, to  elevate  and  dignify  the  occupation  of  the  farmer,  and 
to  protect  its  members  against  tlie  nuiiu'rous  combinations  by 
which  their  interests  are  injuriously  affected  by  means  of  com- 
bined co-operative  association.  Tlie  order  Avas  to  provide  sys- 
tematic arrangements  for  procuring  and  disseminating  infor- 
mation relative  to  crops,  demand  and  supply,  prices,  markets 
and  transportation  throughout  the  country,  and  for  the  estab- 
lislunent  of  depots  for  the  sale  of  products  in  the  cities;  also 
for  the  purchase  and  exchange  of  stock  and  seeds,  for  employ- 
ment bureaus,  for  ascertaining  the  merits  of  newly  invented 
farm  implements,  and  for  detecting  and  exposing  those  that 
were  unworthy,  and  for  protecting,  by  all  available  means,  the 
farming  interests  from  fraud  and  deception  of  every  kind.^^* 
On  the  new  circular,  embodying  these  with  the  former  provi- 
sions, was  based  the  real  foundation  of  the  order.-^^^ 

But  even  though  the  order  trimmed  its  sails  to  the  agita-. 
tion  among  the  farmers,  its  progress  continued  far  from  sat- 
isfactory. By  the  close  of  1868  only  four  granges  in  Minne- 
sota had  paid  their  dispensation  fees,  and  a  fifth  had  been 
organized  gratuitously.  But  IMr.  Kelley  continued  the  strug- 
gle, though  at  times  "almost  against  hope."  "-" 

Beginning  with  the  new  year,  prospects  brightened.  By 
February  20,  six  new  granges  had  been  added  to  the  list,  and 
on  February  23,  1869,  the  ^Minnesota  State  Grange  was  duly 
organized, '^-^  and  continued  its  session  two  days.  It  was  here 
suggested  that  the  different  subordinate  granges  should  lease 
flouring  mills  in  their  respective  localities  and  appoint  a  busi- 
ness agent  at  St.  Paul,  who  was  to  receive  the  flour  and  ship 
it  to  New  York,  where  it  would  be  sold  on  commission.'^^-  The 
executive  committee  accordingly  appointed  Mr.  Prescott  state 
agent.  ^Ir.  Kelley  approved  of  this  business  feature,  and  be- 
gan to  look  around  for  men  of  means  to  support  the  enterprise. 
The  National  Grange  held  its  first  annual  session  in  AVashing- 


318.  Ibid.,   pp.    125-130;   Sauk   Rapid.s   Sentinel,   Oct.    2,    1868. 

319.  KeUey,  op.  cit.,  p.  130. 

320.  Ibid.,   p.   151. 

321.  Ibid.,   p.   165. 

322.  Ibid.,   p.   168;  Letter  from  O.  H.  K.   to  McDoweU.   Marcii   1,   1869. 
6 


82  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

ton,  April  13.  They  Iiere  discarded  the  I\Iinnesota  state  agency 
as  premature.''-^  Every  subordinate  grange  in  Minnesota,  how- 
ever, approved  of  tlie  plan,  hut  held  it  to  be  a  local  matter 
which  did  not  necessarily  involve  the  order.  Their  immediate 
concern  seems  to  have  been  to  secure  farm  machinery  at  re- 
-duced  rates.  Mr.  Kelley  was  glad  to  see  something  started, 
for,  if  the  farmers  could  be  brought  to  fight  the  retail  dealers 
through  the  order,  the  order  would  be  advertised  throughout 
the  state  and  nation.  If  the  agency  proved  a  success,  the  Na- 
tional Grange  could  adopt  the  plan.  If  it  failed,  all  official 
connection  with  it  could  be  disclaimed.^^*  At  the  meeting  of 
the  National  Grange  held  in  "Washington,  January  25,  1870, 
Mr.  Kelley  could  report  a  total  of  forty-nine  granges,  forty  of 
which  w^ere  in  Minnesota.  Iowa  had  three  granges;  Illinois 
had  three ;  and  Ohio,  Pennsylvania,  and  New  York,  each  one."'-^ 
So  far  the  Grange  Patrons  had  been  mainly  interested  in 
their  fight  with  the  middlemen.  Many  communities  through- 
out the  state  were  still  without  railroads,  and  were  anxious  to 
secure  them  at  any  cost.  The  agitation  against  railroad  abuses 
had  not  yet  taken  any  definite  form.  In  Illinois  the  situation 
was  different.  The  main  railroad  lines  had  already  been  built. 
Corn,  their  chief  farm  product,  could  not  bear  heavy  trans- 
portation charges  and  discriminatory  rates  would  be  particu- 
larly oppressive.  Hence  it  was  not  long  before  the  farmers 
were  engaged  in  a  lively  struggle  with  the  railroads.  The 
Prairie  Farmer  was  instrumental  in  calling  a  convention  of 
producers,  to  meet  at  Bloomington,  Illinois,  April  20,  for  the 
purpose  "of  devising  means  to  combat  the  vast  railroad  mo- 
nopolies that  threaten  to  overAvhelm  the  country. ' '  ■'-®  Mr. 
Corbett,  the  editor  of  this  paper,  considered  this  the  best  op- 
portunity that  had  ever  been  offered  for  the  order  of  Patrons 
of  Husbandry  to  make  itself  felt  among  the  farmers,  and  there- 
fore wrote  to  Mr.  Kelley,  inviting  him  to  attend  the  conven- 
tion and  bring  the  order  before  them.  He  closed  his  letter 
with  the  following  words:     "You  must  be  present  fully  pre- 


323.  Ibid.,   p.   180;  Letter  from  O.  H.  K.  to  McDowell,  April   17,   1869. 

324.  Ibid.,  pp.  186-7;  Letter  from  O.  H.  K.  to  McDowell.  May  4,  1869. 

325.  Ibid.,  p.  219;  second  Annual  Report. 

326.  Ibid.,    p.    245;    cf.    Periam,    A    History    of    the    Origin,    Aim    and 
Progress  of  the  Farmers'  Movement,  p.  225. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  83 

pared  to  make  a  telling  api)eal  i'or  the  cause  through  the  or- 
ganization to  which  you  have  already  devoted  so  much  time 
and  labor.  You  can  do  more  for  it  here  in  a  single  day  than 
in  months  in  the  usual  manner.  Please  let  me  hear  that  you 
will  be  present. ' '  ^-^ 

Mr.  Kelley  does  not  seem  to  have  been  prepared  to  incor- 
porate anti-railroad  agitation  in  the  program  of  the  order,  and 
did  not  accept  the  invitation.  The  convention  was  attended 
by  a  large  number  of  leading  farmers  from  different  parts  of 
Illinois.  Governor  John  ]\I.  Palmer  sent  a  letter  in  which  he 
expressed  the  hope  that  the  convention  would  assert  and  pre- 
pare to  maintain  that  there  is  no  interest  in  this  country  that 
is  or  can  be  beyond  the  control  of  the  law.^^^  A  series  of  eight 
resolutions  were  drawn  up  in  which  it  was  declared:  "First, 
that  the  present  rates  of  taxation  and  transportation  are  un- 
reasonable and  oppressive  and  ought  to  be  reduced ;  second 
that  our  legal  rights  to  transportation  and  market  ought  to  be 
clearly  set  forth  and  defined."''-^ 

On  the  thirteenth  of  IMay,  1870,  a  constitutional  conven- 
tion adopted  a  new  constitution  for  the  state  of  Illinois  which 
was  subsequently  ratified  by  the  people.  This  constitution 
reflects  the  influence  of  the  farmers  of  the  state  by  devoting 
seven  sections  to  railroads,'^"'"  and  another  seven  to  ware- 
houses.''"^ Railroads  were  declared  public  highways,  and  it 
was  made  the  duty  of  the  general  assembly,  from  time  to  time, 
to  pass  laws  establishing  reasonable  maximum  rates  of  charges 
for  the  transportation  of  ])assengers  and  freight  on  the  dif- 
ferent railroads  of  the  state,"'-  and  to  pass  laws  to  correct 
abuses  and  prevent  unjust  discrimination  and  extortion  in 
rates  on  the  different  railroads,  and  to  enforce  such  laws  l)y 
adequate  penalties.^"^  These  provisions  led  directly  to  the  en- 
actment of  the  so-called  Granger  laws  of  1871  and  1874.  When 
the  constitutional  convention  met  in  INlay,  1870,  there  were 
two  subordinate  granges  in  the  state,  and  when  the  legislature 

327.  KeUey,  op.  cit.,  p.  245-6;  W.  W.  Corbett  to  KeUey,  April  11,  1870. 

328.  Periain,  op.  cit.,  p.  228. 

329.  Ibid.,   p.   229. 

330.  Const,  of  111.,  1870,  Art.  II,  sees.   9-15. 

331.  Ibid.,Art.   13. 

332.  Ibid.,   Art.  II,   sec.    12. 

333.  Kelley,  op.  cit.,  p.  269  and  271. 


84  MINNESOTA    U1ST(JK1CAL,    SOCIETY    COLLECTIONS. 

met  in  January,  1871,  only  one  more  had  l)een  organized.  As 
an  advertisement  for  the  order,  a  temporary  state  grange  was 
organized  in  Cliieago  in  -July,  1870 ;•'■'*  ))ut  it  did  not  ])rove 
active  and  had  to  ))e  i-eorganized  in  1872,  wlien  granges  l)egan 
to  get  numerous. 

On  jMay  20,  1870,  Mr.  Coi-hett  wrote  a  letter  to  :\rr.  Kelley, 
in  whieh  he  exi)ressed  his  firm  eonvietion  that  tlie  order  had  a 
work  to  perform  in  the  war  that  was  a1)out  to  be  waged  l)y 
the  jx'ople  against  tlie  monstrous  monopolies.  Said  lie:  "Rail- 
road ('ompani(^s,  Warehouse  and  Telegra[)h  Companies,  are 
crushing  the  life  out  of  the  producing  classes.  *  *  *  * 
AVe  know  the  claims  of  vested  rights  that  Railroad  Companies, 
in  the  AVest  especially,  lay  claim  to.  A  corporation  on  the 
plea  of  public  interests,  gets  the  right  of  way,  condemns  prop- 
erty— our  very  homesteads,  perhaps ;  to  do  this  they  are  public 
corporations,  acting  for  the  public  good.  The  charter  and  right 
of  way  once  gained,  this  public  character  ceases,  and  railroad 
companies  are  private  institutions  not  amenable  to  Legislatures 
or  Courts,  because  the  legislature  has  given  away  its  power  to 
regulate  them.  They  can  extort,  oppress,  rol).  They  can  dis- 
criminate in  favor  of  certain  localities  and  individuals ;  they 
can  combine  with  owners  of  warehouses,  or  build  warehouses 
of  their  own,  and  force  shippers  to  pay  toll  on  every  bushel 
of  grain  that  passes  over  their  road ;  they  can  and  do  refuse 
to  deliver  grain  or  other  produce,  except  to  such  ])ersons  or 
companies  as  may  pay  into  their  OAvn  coffers.  ***** 
AVe,  as  Patrons  of  Husbandry,  have  united  for  couHuon  good 
and  for  common  protection.  *  *  *  *  AV(>  must  not  be 
political  in  the  common  aceeptance  of  the  term,  only  so  far 
as  to  control  politicians  and  office-holders,  to  make  them  talk, 
legislate,  and  decide  on  the  side  of  the  people  all  the  time, 
*■  *  *  *  whichever  party  will  declare  itself  to  stand  on 
our  i)latform,  and  Avhichever  candidate  will  uncjualifiedly 
pledge  himself  to  carry  out  the  reforms  we  demand,  such  party 
and  such  candidates  should  receive  our  votes.  ***** 
Oi)position  to  monopolies  seems  to  me  to  be  entirely  consistent 
with  the  design  of  our  Order;  with  it  as  one  of  the  watch- 
words, 1   belie\'e  we   have   llie   ojipoi't unity  of    extending    our 

334.      KcUty.  oij.  cit.,   ii]<.   -ti^  and  271. 


RAILHOAD  LEGISLATION   IX   MINXKSOTA.  85 

Granges  indefinitely  llirouiiliout  all  these  Noi-tli- Western 
States."  •■'•^= 

This  letter  was  read  before  the  iMinnesota  state  jjrange 
whieli  met  June  22,  1870,  and  it  gave  sueh  general  satisfaction 
that  it  was  ordered  printed  foi'  eirculat ion. ■■••'"  ^Ir.  Kelley  had 
some  misgivings  as  to  the  result  of  such  a  war,  but  looked  upon 
the  publication  of  the  letter  as  another  Avay  of  bi'inging  the 
order  more  prominently  before  the  public. ^'•^"  Definite  (expres- 
sion was  here  given  to  the  farmer  for  his  grievances  against 
the  railroads.  The  agitation  against  raili'oads  soon  became  as 
lively  in  ^linnesota  as  in  Illinois. 

When  the  ^Minnesota  state  grange  met  in  June,  1870,  there 
were  sixty-six  subordinate  granges  in  the  United  States,  of 
which  fifty  were  in  ^linnesota.  The  order  had  been  advertised 
as  national,  and  ]\Ir.  Kelley  Avas  anxious  to  make  it  such  in 
fact  as  well  as  in  name.  The  other  officers  of  the  National 
Grange  had  disappointed  him  by  their  inactivity.  He  decided 
to  move  to  Washington  and  make  that  city  his  headquarters, 
believing  that  he  could  in  this  way  exert  a  wider  influence.^'® 

The  services  of  a  number  of  good  men  were  enlisted  in  a 
number  of  states,  and  the  order  began  to  make  a  remarkable 
progress  throughout  the  country.  "Co-operation,"  and  "down 
with  the  monopolies,"  were  proving  popular  catchwords.  The 
growth  of  the  order  for  several  years  was  unprecedented.  The 
number  of  granges  organized  each  year  for  ]8G8  to  1874,  in- 
clusive, was  as  follows  ■.'■'■'■'■^ 


State 

granges. 

Subordinate  granges. 

Gi 

■anges 

in  Minn. 

(Total  No.) 

186S 

0 

10 

5 

1869 

1 

38 

33 

1870 

2 

36 

19 

1871 

2 

130 

1872 

8 

1,105 

187.3 

22 

8,868 

3.58 

1874 

4 

11,941 

It  was  with  these  figures  in  luind  that  ^Fr.  Aitkin,  an  old 
Granger,  said  in  an  address  before   a   convention  of  agricul- 


.335.  KeUey,   op.  cit.,  pp.   256-259;   W.  W.  Corbett  to  KfUey. 

3.36.  Ibid.,   p.   256. 

337.  Ibid.,   p.   259. 

338.  Ibid.,  passim. 

339.  Department   of  Agriculluro,   Special   Report   Xo.   2    (1883),   p.   63. 


86  MINNESOTA    HISTOniCAL   SOCIKTY    COLLECTIONS. 

turist.s  held  at  the  Dei)ai't merit  of  Agrieiilture  in  Jaimary, 
1883:  "From  the  Potomac  to  the  Kio  Grande,  from  tlie  Golden 
State  to  the  Hudson,  and  even  into  the  pineries  of  i\Iaine,  and 
across  the  border,  throiigliout  the  length  and  breadth  of  the 
Dominion  of  Canada,  farmers  fairlj'-  leaped,  as  with  one  pre- 
concerted l)ound,  to  the  upholding  of  the  Grange  standard." 

CITAPTKK  IX. 
THE  CAMPAIGN  FOR  RAILROAD  REGULATION  IN  1870. 

The  discontent  among  the  farmers  of  Minnesota  was  con- 
stantly increasing  during  the  later  sixties.  They  were  not 
enjoying  the  prosperity  they  had  looked  for,  and  as  the  hard 
times  continued  they  became  more  and  more  convinced  that 
they  were  being  exploited.  In  general  they  attributed  their 
sorry  plight  to  three  main  factors :  the  exorbitant  charges  of 
the  middlemen,  the  financial  policy  of  the  national  government, 
and  the  increasing  power  of  corporations  and  monopolies,  es- 
pecially of  the  railroad  companies. 

AVhen  the  legislature  convened  in  1870,  Governor  Austin  in 
his  inaugural  address  '^^  took  occasion  to  examine  the  popular 
complaints  against  the  management  of  the  railroads  within 
the  state,  and  also  to  present  as  fairly  as  possible  the  rail- 
roads' side  of  the  case.  Realizing  that  the  charges  made  by 
either  side  against  the  other  might  be  neither  wholly  true  nor 
wholly  false,  he  advised  that  a  commission  be  created  to  make 
fidl  inquiry  into  the  alleged  abuses  and  to  present  some  plan 
remedying  the  difficulties,  if  abuses  be  found  to  exist.  He  did 
not  question  the  constitutional  right  of  the  legislature  to  reg- 
ulate freight  and  passenger  tariffs,  nor  doubt  the  necessity 
of  so  doing,  but  he  desired  regulation  leased  on  accurate  knowl- 
edge gained  by  careful  investigation.  "If  the  people  are 
wronged,"  he  said,  "it  would  be  a  short-sighted  policy  on  the 
part  of  the  companies  to  strive  to  perpetuate  the  wrong;  for 
when  the  people  can  bear  it  no  longer,  they  will  arise  in  their 
might  and  find  some  means  of  redressing  their  grievances,  and 
then  there  will  be  danger  of  injustice  on  the  other  side.     If 

340.     Minn.   Exec.   Docs.,    1869,   Inaugural   Address    (25    pp.),   Corpora- 
tions, pp.  6-14. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  87 

the  popular  complaints  are  not  Avell  founded,  a  full  impartial 
investigation  -will  establish  the  fact,  vindicate  the  corporations, 
and  put  the  question  forever  at  rest, — a  result  much  to  the 
advantage  of  all  concerned. '''^^ 

The  governor's  recommendation  met  Avith  general  approval 
among  the  people.  A  bill  embodying  its  main  features  was  in- 
troduced in  the  Senate  and  passed,  but  when  the  bill  reached 
the  House  it  Avas  permitted  to  die  of  neglect. ^•*- 

The  question  of  railroad  regulation  had  not  figured  promi- 
nently in  the  preceding  campaign,  but  in  the  campaign  of  1870 
it  sprang  into  prominence  in  different  parts  of  the  state.  The 
farmers  in  particular  were  aroused.  As  we  have  seen,  the 
order  of  Patrons  of  Husbandry  was  proposed  to  them  as  a 
means  of  self-protection  against  railroads  and  monopolies,  but 
its  growth  at  this  time  was  slow.  It  was  not  yet  strong  enough 
to  exert  the  influence  its  friends  expected  of  it.^*^ 

The  anti-railroad  sentiment  was  especially  marked  in  the 
first  congressional  district,  where  the  Winona  and  St.  Peter 
railroad  was  very  unpopular  at  the  time.  In  the  Republican 
convention  of  this  district,  held  in  Owatonna  July  6,  emphatic 
protests  were  made  against  railroad  extortions,  and  the  fol- 
lowing declaration  was  embodied  in  their  platform  :  "  *  *  * 
the  tendency  toward  consolidation  of  parallel  or  competing 
lines  of  roads,  and  of  roads  without  competition  from  other 
roads  or  lines  of  water  transportation,  to  exact  extortionate 
rates  of  tariff  for  the  transportation  of  freight,  and  to  operate 
the  corporations  in  the  interests  of  jobbers,  speculators  and 
monopolies,  without  regard  to  the  interests  of  the  people,  is 
dangerous  to  the  commerce  and  industries  of  the  countrj^  and 
should  be  restrained  and  suppressed  by  the  exercise  of  all  pow- 
ers over  the  subject  delegated  to  Congress  or  retained  to  the 
state.  "^**  In  support  of  this  plank  in  the  platform.  Governor 
Austin  said  in  the  convention:  "I  believe  the  masses  of  our 
state  are  beginning  to  suffer  from  tlie  extortions  and  burdens 

341.  Ibid.,  p.  14. 

342.  Ibid.,   1870,    Governor's   Message,    pp.    38-39. 

343.  See  Wabasha  Weekly  Herald,  Sept.  15,  1870,  p.  1,  c.  3:  "Now 
why  don't  this  Order  come  up  to  its  pretentions?  *  *  *  It 
is  time  the  Patrons  showed  themselves  equal  to  tlieir  under- 
taking." 

344.  Minneapolis   Daily  Tribune,   July  7,   1870,   p.   1,   c.   4. 


88  MINNESOTA    HISTORICAL    SOCIETY    COLLECTIONS. 

imposed  by  merciless,  greedy  iiionopolies  and  soulless  corpora- 
tions, to  an  extent  hardly  equalled  from  all  the  taxes  imposed 
by  the  combined  general  and  state  governments.  To  relieve 
them  from  these  burdens  will  test  the  powers  and  resources  of 
politicians  and  statesmen  more  severely  than  the  old  well-Avorn 
issues  of  the  past.  The  wrongs  aimed  at  in  the  resolution  have 
rapidly  grown  in  great  proportions,  and  if  necessar}^  in  order 
to  correct  them,  we  should  seize  them  by  the  foretop  and  shake 
them  over  hell  till  they  get  a  smell  of  their  manifest  des- 
tiny. "^'^^ 

It  is  not  to  be  understood,  however,  that  this  was  primarily 
an  anti-railroad  convention.  The  delegates  were  fully  as  in- 
terested in  the  tariff,  and  it  must  be  considered  a  notable 
achievement  that  the  discordant  elements  managed  to  agree  on 
resolutions  heartily  endorsing  President  Grant  and  Congress, 
and  at  the  same  time  urging  the  reduction  of  the  tariff  to  a 
revenue  standard.''**'  Mark  H.  Dunnell  was  nominated  for  Con- 
gress, pledged  to  corporation  control  and  tariff  for  revenue 
only.  Republican  county  and  senatorial  district  conventions 
endorsed  this  platform,  and  quite  generally  passed  resolutions 
in  favor  of  legislative  railroad  regulation.'*' 

The  Democrats  of  the  first  congressional  district  met  in  con- 
vention at  Owatonna,  September  15.  Some  of  the  county  dele- 
gations were  decidedly  mixed.  In  Fillmore  county,  for  in- 
stance, the  delegates  had  been  chosen  in  a  "people's  conven- 
tion," without  regard  to  former  political  affiliation.'**  There 
were  quite  a  number  who  had  hitherto  regularly  affiliated  with 
the  Republican  party,  who  now  refused  to  support  Mr.  Dun- 
nell, contending  that  he  was  a  monopolist  and  a  politician. 

Though  evidently  many  had  looked  for  this  to  be  distinctly 
an  anti-monopoly  convention,  resolutions  offered  against  mo- 
nopolies and  railroads  were  voted  down  and  not  included  in 


345.  St.  Peter  Tribune,   Oct.   26.   1S70,   p.   2,  c.   2. 

346.  MinneapoUs  Daily  Tribune,  July  7,  1870,  p.  1,  c.  4,  for  party 
platform.  See  also  St.  Paul  Daily  Pioneer,  July  7,  1870,  p.  1, 
c.  4;  July  9,  p.  1,  c.  1. 

347.  See  Wabasha  County  Republican  platform,  Wabasha  Weekly 
Herald,  Oct.  6,  1870,  p.  1,  c.  4;  20th  senatorial  district  Republi- 
can platform.  The  Wells  Atlas  (Faribault  Co.),  Oct.  14,  1870, 
p.  1,  c.  3. 

348.  Federal  Union   (Rochester),  Sept.  17,  1S70,  p.  1,  c.  3. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  89 

the  platform."^"  This  may  have  been  done  to  gain  votes  for 
their  congressional  candidate,  Mr.  Buck,  in  frontier  counties 
where  the  i)eople  were  still  elainoring  for  railroads  and  favor- 
able railroad  legislation. 

The  Olmsted  country  Democratic  convention,  which  met  at 
Rochester,  September  10,  had  shown  itself  more  militant.  A 
call  had  been  issued  to  "all  men,  irrespective  of  past  party 
associations,  who  are  in  favor  of  taking  the  robbers  ])y  the 
throat."'^''''  While  nominally  a  Democratic  convention,  it  was 
in  reality  a  joint  convention  of  Democrats,  anti-monopolists, 
and  "anti-tariffites."  It  was  here  resolved  that  the  state  leg- 
islature had  the  power  and  ought  to  fix  the  maximum  rate  of 
charges  on  all  transportation  lines  in  the  state,  and  to  regulate 
and  control  the  consolidation  of  transportation  companies. 
They  agreed  not  to  supi)ort  any  man  for  office  who  would  not 
pledge  himself  to  Avork  faithfully  for  these  principles  and  to 
bring  about  at  once  "such  legislation  as  vrill  protect  farmers, 
merchants,  tradesmen,  and  all  other  citizens  of  the  state,  from 
a  repetition  of  intolerable  and  hearth^ss  swindles  like  those 
that  have  been  and  are  now  being  perpetrated  upon  them  by 
the  management  of  the  AVinona  and  St.  Peter  railroad. "  ^'^^ 
All  the  candidates  nominated  in  this  convention,  excepting  one, 
were  farmers,  men  Avho  had  "consistently  opposed  monopolies 
and  protective  tariffs  for  years. " ''^'■- 

On  September  12  a  call  was  issued  for  an  indignation  meet- 
ing against  the  abuses  of  the  AVinona  and  St.  Peter  railroad 
company,  and  for  considering  the  "propriety  of  contesting  the 
legality  of  the  present  rates  of  tariffs  in  freights  or  securing 
some  other  relief  from  the  oppression. "  •^"'^  The  meeting  was 
to  be  held  at  Rochester,  September  16.  This  call  was  signed 
by  thirty-seven  men,  of  whom  only  six  were  Democrats.  The 
Democrats  felt  aggrieved  at  this,  and  decided  to  capture  the 
meeting.''^*     They  thought  it  a  device  of  the  managers  of  the 


349.  Rochester  Post,  Nov.  5,  1870,  p.  2,  c.  3;  for  platform  see  also 
Federal  Union,  Sept.  24,  1870,  p.  4,  c.  3;  St.  Paul  Daily  Pioneer, 
Sept.  16,  p.  4,  c.  2;  and  Sept.  17,   p.   1,  c.   2. 

350.  Federal  Union    (Rochester),  Sept.   17,   1870,   p.   4,  c.   3-7. 

351.  Ibid.,    Sept.    17,    1870,    p.    1,    c.    4. 

352.  Ibid. 

353.  Ibid.,  Sept.   24,   1870,  p.   4,   c.   4. 

354.  Ibid.,  Sept.   24,   1870,   p.   1,   c.   3. 


90  MINNESOTA   HISTORICAL    SOCIETY    COLLECTIONS. 

Kei)ul)licau  party  for  making  political  capital  out  of  the  anti- 
railroad  sentiment  of  the  community.''-'''  AVhen  the  Republi- 
cans found  the  Democrats  read}''  to  join  them  they  held  back. 
A  Democrat  was  elected  chairman  and  another  secretary.  The 
committee  of  five  on  resolutions  was  mainlj'-  Democratic.  The 
resolutions  offered  and  accepted  at  the  meeting  had  been  pre- 
pared beforehand  by  ]\Ir.  Jones,  a  Democratic  candidate  for 
state  representative.  These  resolutions  denounced  the  wheat 
rings  and  the  excessive  transportation  charges,  and  demanded 
redress  by  the  railroad  company  and  the  enactment  of  state 
laws  to  afford  the  people  ample  protection  in  the  future.'"'" 

Little  or  nothing  came  of  this  indignation  meeting.  One 
member  of  the  committee  appointed  to  report  to  the  railroad 
company  believed  that  the  company  had  been  punished  enough 
already,  and  feared  that  the  stirring  up  of  popular  feeling 
would  lead  to  the  destruction  of  property  if  not  of  life.^''' 

A  dispute  arose  as  to  which  party  was  entitled  to  credit 
for  leadership  in  the  anti-railroad  crusade.  The  Democrats 
blamed  the  Republican  party  for  the  existence  of  the  vexing 
problem,  it  having  been  in  power  continuously  for  ten  years. 
The  Republicans  in  turn  pointed  to  the  first  congressional  dis- 
trict platforms,  in  which  they  were  openlj^  pledged  to  railroad 
control,  while  the  Democrats  were  not."''^  They  could  also 
refer  back  to  territorial  days,  when  Democratic  legislatures 
had  granted  the  charters  on  which  the  railroad  companies 
based  their  rights  to  manage  their  business  in  their  own  way 
without  state  interference. 

In  the  first  congressional  district  the  anti-railroad  senti- 
ment ran  high,  but  in  tlie  second  it  was  not  so  marked.  There 
the  tariff  question  was  of  greater  interest.  For  a  long  time 
it  seemed  as  though  the  Republicans  would  be  hopelessly  di- 
vided, but  when  they  finally  met  in  convention  in  St.  Paul, 
September  1,  they  agreed  on  a  platform  in  which  they,  like  the 
first  district  Republicans,  endorsed  President  Grant  and  Con- 


355.  Rochester  Post,  Sept.  24,  1870,  p.  3,  c.  4. 

356.  Federal  Union,   Sept.   24,   1870,   p.   4,   c.   4. 

357.  Ibid.,  Dec.  10,   1870,  p.   1,  c.   3. 

358.  See  Address  of  the  Rep.  Congressional  Committee  to  the  voters 
of  the  First  District,  St.  Charles  Herald,  Oct.  21,  1870,  p.  2,  c. 
1-3. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  91 

gress,  and  pledged  tlieinselves  to  the  ''sound  and  incontro- 
vertible doctrine  of  tariff  for  revenue  only."''"'"  The  platform 
does  not  mention  the  railroads  at  all,  save  to  commend  the 
Northern  Pacific  and  to  recommimd  liberal  national  aid  in  its 
favor.     General  John  T.  Averill  was  nominated  for  Congress. 

]\Iany  Republicans  of  the  second  district  Avere  dissatisfied 
with  tlie  results  of  the  convention,  being  pleased  with  neither 
candidate  nor  platform.  Consequently  a  number  of  them, 
twenty-five  hundred  according  to  the  St.  Paul  Pioneer,  joined 
in  signing  a  petition  requesting  Ignatius  Donnelly  to  run  as  an 
independent  candidate  on  a  low  tariff,  labor  and  economy  plat- 
form."'^'^  The  Democratic  district  convention,  which  met  in 
St.  Paul,  September  15,  endorsed  his  candidacy  and  platform.''"' 
No  definite  stand  was  taken  on  the  railroad  question. 

In  the  November  election  the  Republicans  elected  hoth  con- 
gressmen, though  by  a  reduced  majority,  and  made  gains  in 
the  lower  house  of  the  state  legislature.  They  elected  thirty- 
three  representatives,  the  Democrats  twelve,  and  two  were 
elected  on  independent  tickets.  The  preceding  House  had  con- 
tained twenty-eight  Republicans  and  nineteen  Democrats.  The 
1871  Senate,  however,  would  contain  twelve  Republicans,  eight 
Democrats,  and  two  Independents,  as  against  fourteen  Republi- 
cans and  eight  Democrats  in  1870. '*'- 

The  Federal  Union  of  Rochester  announced  the  results  of 
the  election  under  the  following  headlines:  "The  People  Vic- 
torious !  Monopolists  Sentenced !  Our  Railroads  must  be 
managed  in  the  interests  of  the  Whole  People,  instead  of  being 
run  to  enrich  Wheat  Rings  and  other  Speculators.  The  People 
have  spoken !  Their  will  must  be  obeyed !  Death  to  all  who 
dare  betray  them.""''''  In  that  part  of  the  state  two  anti- 
monopoly  parties  had  been  in  the  field,  and  the  results  of  the 
election  in  many  cases  merely  determined  w^iat  men  were  to 
be  permitted  to  carry  out  almost  identical  anti-monopoly 
pledges. 


359.  Minneapolis   Daily   Tribune,    Sept.    2,    1870,    p.    1,    c.    1;    platform, 
p.   2,   c.   2  and   3. 

360.  St.  Paul  Daily  Pioneer,   Sept.   14,   1870,   p.   1,   c.   2. 

361.  Ibid.,   Sept.   16,   1870,   p.   1,  c.   1,  and  p.   4,  c.   2. 

362.  Minneapolis   Daily   Tribune,   Nov.    12.    1870,    p.    1,   c.    3. 

363.  Federal  Union,  Nov.  12,  1870,  p.  1,  c.  3. 


92  MINNESOTA    IJISTORICAL    SOCIETY    COLLECTIONS. 

Popular  interest  in  the  railroad  issue  did  not  subside  with 
the  election.  On  November  12  the  Federal  Union  issued  a  call 
for  a  convention:  "To  the  people  of  the  first  congressional 
district,  to  those  who  are  being  fleeced  annually  by  the  extor- 
tions of  the  railroad  monopolists  and  rings  of  speculators,  to 
those  who  are  willing  to  do  their  duty  as  citizens  by  lending 
their  assistance  and  influence  in  honorable  and  proper  efforts 
to  procure  the  repeal  of  such  legislation  as  is  prejudicial  to  the 
public  interests,  and  the  enactment  of  such  laws  as  will  protect 
the  people  against  the  extortion  of  railroad  companies  and  all 
other  monopolies,  including  wheat  rings."  ■''•*  The  convention 
was  to  be  held  in  Rochester,  December  1.  The  people  of  the 
second  congressional  district  Avere  urged  to  hold  a  similar  con- 
vention, and  to  co-operate  in  l)ringing  to  bear  upon  the  state 
legislators  "a  force  they  cannot  resist,  and  wliich  will 
strengthen  them  in  their  efforts  to  carry  out  the  o])jects  we 
have  in  view. ""*'•''  Editors  "without  regard  to  partisan  pro- 
clivities" were  called  upon  to  help  advance  the  movement. 
State  senator-elect  Hodge  (Dem.)  issued  a  fiery  appeal  to  the 
people  of  Olmsted  county:  "*  *  *  and  now,  without  dis- 
tinction of  party,  let  us  organize  our  forces  for  the  contest.  A 
call  has  been  made  to  meet  in  convention  *  *  -'  for  the 
purpose  of  taking  counsel  together  and  of  devising  ways  and 
means  whereby  we  may  effectually,  tlioroughly  and  forever 
emancipate  ourselves  from  a  system  of  raihvay  extortions  that 
have  become  too  galling  and  oppressive  for  a  free  people  to 
endure. ' ' "®" 

At  this  convention  the  committee  on  resolutions  presented 
the  following  grievances : 

1.  Railroad  charges  were  exorbitant,  and  places  were  dis- 
criminated against.  They  showed  that  the  AVinona  and  8t. 
Peter  railroad  company  made  the  following  charges  for  the 
transportation  of  wheat : 

From  Eyota  to  Winona,  ,3S  miles loc.  per  bushel. 

From  Rochester  to  Winona,  45  miles 15c.  per  bushel. 

From  Kasson  to  Winona,  58  miles 17c.  per  bushel. 

From  Owatonna  to  Winona,  92  miles 10c.  per  bushel 

From  Mankato  to  Winona,  150  miles l.Sc.  per  bushel. 

364.  Ibid.,  p.  1,  c.  7. 

365.  Ibid.,  p.  1,  c.  7. 

366.  Ibid.,  Nov.  19,  1870,  p.  4,  c.  5;  Letter  dated  Nov.  15,  1870. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  93 

They  coiiteudcd  that  if  the  rates  from  the  two  hitter  places 
to  AVinoua  were  rea.sonahle,  the  other  rates  must  Ix;  exorhitant. 
They  believed  that  the  transi)ortation  charges  should  be  re- 
duced from  twenty  to  fifty  per  cent  or  more. 

2.  The  AVinona  and  St.  Peter  railroad  company  discrim- 
inated in  favor  of  certain  associations  or  "rings,"  to  the  ruin 
of  local  business  men. 

3.  The  railroad  company  had  assumed  authority  to  grade 
the  grain  and  had  permitted  its  employees  to  favor  its  "ring" 
patrons. 

The  convention  passed  resolutions  calling  for  reasonable 
rates  Avith  no  discrimination,  and  for  a  satisfactory  elevator 
system  not  ow^ned  or  controlled  by  the  railroads.  A  committee 
of  seven  was  constituted  a  permanent  executive  committee.  A 
memorial  to  the  state  legislature  was  drawn  up,  urging  the 
enactment  of  laws  (1)  compelling  the  railroads  of  the  state  to 
carry  freight  and  passengers  at  fair,  equitable,  and  reasonable 
rates;  (2)  to  make  unfair  or  partial  discriminations  by  means 
of  lower  rates,  drawbacks  or  rebates,  criminal  offences;  (3)  to 
forbid  the  railroad  companies  to  own  or  operate  elevators  or 
to  purchase  grain  for  speculation.  "^' 

The  farmers  had  at  first  been  anxious  to  get  elevators  and 
warehouses  on  almost  any  terms.  AVith  a  fluctuating  market 
the  storing  of  grain  might  not  always  prove  profitable,  and 
besides  it  was  perhaps  only  a  question  of  time  when  the  farm- 
ers would  build  granaries  and  store  their  own  grain. ^"**  In 
order  to  meet  the  demands  of  the  farmers,  the  railroad  com- 
panies freciuently  made  arrangements  with  certain  persons  or 
companies,  w^ho  furnished  facilities  for  receiving  and  storing 
grain  and  were  given  a  certain  "toll"  on  every  bushel  shipped 
at  their  station,  or  in  otiiei-  cases  rebates,  large  enough  to  cover 
market  fluctuations  and  ward  off  competition.'"" 

To  pay  such  tolls  or  rebates  and  still  get  a  good  price  for 
transporting  the  grain,  the  railroad  companies  were  practically 


.367.  Ibid.,  Dec.  3,  1870,  p.  1,  c.  4-8;  Proceedings  of  the  Anti-Monop- 
oly convention. 

368.  Stickney,   The  Railway   Problem,   p.   22. 

369.  For  contracts  of  tliis  kind  see  Report  of  the  Senate  Committee 
to  investigate  the  elevator  monopoly  on  the  St.  Paul  and  Pac- 
ific in  1874,  St.  Paul  Dispatch,  Feb.  14,  1874.  See  also  Roches- 
ter Post.   Feb.   11,    1871. 


94  MINNESOTA    IIISTOIirCAL    SOCIETY    COLLECTIONS. 

forced  to  make  the  regular  rates  quite  liigli.  These  higli  trans- 
portation charges  tended  to  lower  the  prices  of  farm  products, 
and  the  farmers  soon  ])egan  to  denounce  the  "wheat  ring"  in 
no  uncertain  terms."" 

The  farmer  fared  little  l)etter  when  the  elevators  were 
owned  and  operated  by  the  railroad  companies.  The  farmer 
tlien  felt  himself  at  tlieir  merc.y,  hoth  as  to  grading  and  trans- 
portation charges,  and  independent  buyers  were  as  effectually 
barred  out  as  under  the  other  system.  The  AVinona  and  St. 
Peter  railroad  company  in  the  summer  of  1870  forced  the 
farmers  at  Rochester  to  sell  their  wheat  stored  in  the  com- 
pany's elevators  at  what  was  generally  considered  an  unfavor- 
able price.  Under  the  pretext  of  having  to  relmild  and  repair 
the  elevators  in  Rochester,  the  company  set  a  date  at  which 
the  grain  must  be  sold,  or  twelve  cents  a  bushel  per  month 
storage,  without  responsibility  for  safekeeping,  would  be 
charged. ''■^^ 

The  railroad  companies  also  frequently  gave  a  monopoly  of 
the  wood  and  coal  supply  in  towns  and  cities  to  certain  favored 
individuals  or  corporations.  While  this  originally  may  have 
been  intended  to  simplify  a  crude  industry  and  to  give  better 
service  to  the  consumer,  the  system  soon  proved  oppressive 
and  aroused  the  antagonism  of  many  town  people,  enlisting 
their  sympathies  with  the  farmer.  At  times  those  who  enjoyed 
these  monopoly  rights  in  hauling  grain  and  fuel — in  common 
parlance,  the  "rings" — became  so  poAverful  that  instead  of 
continuing  to  receive  rebates  as  a  favor,  they  practically  con- 
trolled the  railroads  and  fixed  their  own  rates  by  i)laying  off 
one  railroad  against  another.''^- 

The  executive  committee  provided  for  in  the  Rochester  con- 
vention, December  1,  issued  a  call  for  a  state  convention  to  be 
held  in  St.  Paul  the  first  Aveek  of  the  following  January.  This 
convention  did  not  prove  a  success.  Farmers  in  different  parts 
of  the  state  had  called  meetings  to  elect  delegates,^^^  but  there 
seemed  to  be  a  general  suspicion,  based  on  certain  develop- 


370.  Stickney,  The  Railway  Problem,  p.  22. 

371.  Federal  Union,  Sept.   24,   1870,  p.  1,  c.  3. 

372.  Stickney,   The   Railway   Problem,   p.   23. 

373.  St.  Paul   Daily   DLspateh,   Dec.   27,   1870,   p.   1,   c.   1,   quoting-  Man- 
kato  Union. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  95 

ments  at  the  Rochester  convention,  that  certain  played-out 
politicians  Avere  trying  to  mount  the  reform  wave  and  get  back 
into  political  power."*  The  regular  Republicans  opposed  the 
convention  strongly,  and  the  Republican  press  gave  it  little  or 
no  support.  Both  Republicans  and  Democrats  regarded  it  as 
a  scheme  for  organizing  a  new  independent  Anti-Monopoly 
party."^ 

The  first  session  was  adjourned  to  the  following  evening 
without  any  action  or  speeches,  because  of  the  small  number 
present.""*'  At  the  regular  session  Mr.  Donnelly  made  the  prin- 
cipal address.  He  complimented  Governor  Austin  on  the  fear- 
less way  in  which  he  handled  the  railroads,  but  expressed  lack 
of  confidence  in  the  legislature  which  had  just  convened.  He 
did  not  believe  that  it  would  do  anything  to  "relieve  the  peo- 
ple of  the  master  monopoly  that  was  closing  its  monster  meshes 
around  them."  '^^ 

The  convention  adopted  a  series  of  anti-railroad  resolutions, 
and  authorized  its  president  to  appoint  a  committee  of  seven 
to  call  future  conventions  and  to  urge  further  organization 
throughout  the  state. "^  This  plan,  which  would  inevitably 
have  led  to  the  organization  of  a  new  political  party  within 
the  state,  met  with  no  popular  favor  and  was  for  the  time  being 
abandoned. 

CHAPTER  X. 

RESTRICTIVE   RAILROAD   LEGISLATION   IN   1871. 

When  the  legislature  met  in  January,  1871,  the  people  of 
tlie  state  began  to  look  with  keen  interest  for  the  fulfillment 
of  campaign  pledges.  "We  wonder,"  said  the  St.  Paul  Dis- 
patch, "whether  the  blandishment  of  railroads,  operating  in 
the  shape  of  passes,  upon  the  members  of  the  present  legis- 
lature, will  lead  them  to  forget  their  first  love,  and  the  prom- 
ises made  the  people  during  the  late  campaign.    We  shall  look 


374.  Ibid.,  Jan.  5,   1871,  p.  1,  c.   1. 

375.  Federal  Union,  Jan.   7,   1871,   p.   1,  c.   4;  St.  Paul  Daily  Dispatch, 
Jan.  5,  1871,  p.   1,  c.  1;  Jan.   6,  p.  1,  c.  1. 

376.  St.  Paul  Daily  Dispatch,  Jan.  5,   1871,   p.   1,  c.  1. 

377.  Ibid..  Jan.  6,  1871,  p.  4,  c.  1  and  2. 

378.  Ibid.,   p.  4,  c.   2. 


96  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

with  anxiety  for  a  notice  of  the  fact  that  the  honorahle  mem- 
ber from has  introduced  a  bill  regulating  the  rate  of 

charges  by  railroad  companies  for  passage  and  transporta- 
tion."^''-* 

Governor  Austin  in  his  message  to  the  legislature  again 
took  up  the  railroad  question  and  discussed  it  at  length.''®" 
Since  his  inaugural  address  his  ideas  concerning  railroad  regu- 
lation had  become  more  definite.  After  further  investigation 
he  had  come  to  the  conclusion  that  the  system  of  freight  tariffs 
and  elevator  charges  practised  l)y  some  of  the  railroads  Avas 
unjustifiable,  extortionate  and  o}>pressive  to  the  last  degree. 
They  destroyed  wholesome  competition  (1)  by  their  discrim- 
ination in  favor  of  particular  markets  and  lines  of  transpor- 
tation, against  private  warehouses  and  buyers  and  shippers 
not  in  the  "ring;"  (2)  by  drawbacks  and  rebates,  which  en- 
abled the  favored  speculator  to  manipulate  to  market  to  the 
injury  of  both  consumer  and  producer;  (3)  by  the  establish- 
ment of  arbitrary  gracies  of  grain  and  classes  of  freight.''®^ 

To  remedy  these  evils  the  governor  recommended  that  the 
following  measures  be  adopted  by  constitutional  enactment 
and  appropriate  legislation  :'*^- 

1.  All  existing  special  railroad  charters  not  in  operation 
within  a  specified  time  were  to  be  declared  void."*' 

2.  Every  railroad  company  doing  business  Avithin  the  state 
to  maintain  an  office  in  the  state,  where  certain  records  were 
to  be  kept  for  public  inspection.^®* 

8.  No  parallel  or  competing  lines  of  railroad  to  be  i)er- 
mitted  to  consolidate.''*'' 

•4.  All  railroads  to  be  declared  public  highways  free  to  all 
for  transportation  under  regulations  prescribed  by  law,  includ- 
ing maximum  reasonable   charges.-'®" 

5.    No  stocks  or  bonds  to  be  issued  except  for  money,  labor, 


379.  St.  raiil  Daily  Dispatch,  Jan.   9,   1871. 

380.  Minn.    Exec.   Docs.,    1870,   Governor's   Message,    pp.    38-55. 

381.  Ibid.,   p.  39. 

382.  Ibid.,   pp.  53-55. 

383.  Cf.    Const,    of    111.    (adopted    in    convention    May    13,    1870),    Art. 
XI,   sec.  2. 

384.  Ibid.,  sec.   9. 

385.  Ibid.,   sec.    11. 

386.  Ibid.,  sec.   12. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  97 

or  property  actually  received  and  applied  to  the  purpose  for 
which  the  corporation  was  created ;  all  fictitious  increase  of 
capital  stock  or  indebtedness  void."^®^ 

6.  The  state's  right  of  eminent  domain  to  apply  to  rail- 
road property  and  franchises  in  the  same  Avay  as  to  other  prop- 
erty.^^^ 

7.  Laws  for  the  correction  of  abuses  and  the  prevention 
of  unjust  discrimination  and  extortion  to  be  enforced  by  ade- 
quate penalties,  involving,  if  necessary,  forfeiture  of  property 
and  franchises.^^^  Public  warehouses  were  also  to  be  defined 
and  similar  provisions  applied  to  them."''" 

These  seven  propositions  were  taken  almost  ver])atira  from 
the  constitution  of  Illinois  adopted  IMay  18,  1870. 

Among  the  legislators  many  were  "breathing  dire  threat- 
enings"  against  the  railroads.  One  of  the  leading  newspapers 
of  the  time  says:  "Almost  every  otlier  member  has  a  bill  or 
resolution  or  scheme  to  launch  u])on  the  subject,  and  it  prom- 
ises to  be  one  of  the  leading  topics  this  winter."  "'^^  The  Roch- 
ester Board  of  Trade  presented  to  the  legislature  a  memorial 
relating  to  alleged  extortionate  freight  charges  of  the  AVinona 
and  St.  Peter  railroad  company.""-  Two  thousand  citizens  of 
Olmsted,  Winona  and  Fillmore  counties  petitioned  for  the  en- 
actment of  a  law  compelling  the  railroad  companies  of  the 
state  to  carry  freight  and  passengers  at  equitable  and  reason- 
able rates.^^^ 

The  anti-monopoly  element  was  strong  within  the  legisla- 
ture, and  strong  pressure  was  brought  to  bear  from  the  out- 
side. But  it  is  quite  apparent  that  the  railroad  interests  were 
not  without  representation  and  influence.  A  bill  which  pro- 
vided for  the  apportionment  of  the  internal  improvement  lands 
of  the  state  among  the  different  railroad  companies  was  skil- 
fully engineered  through  ])oth  houses  of  the  legislature,  meet- 
ing practically  no  opposition.     This  "Land  Grab"  bill  failed 


1871,   V.    2,   c.    1. 


387. 

Ibid.,   sec.   13. 

388. 

Ibid.,   sec.   14. 

389. 

Ibid.,   sec.   15. 

390. 

Ibid.,   Art.   XIII;    Warehouses. 

391. 

St.   Paul  Daily   Dispatch,  Jan. 

392. 

House  Journal,   1871,  p.  52. 

393. 

7 

Ibid.,   p.  52. 

98  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

to  become  a  law  only  because  of  the  governor's  veto  and  his 
unsparing  exposure  of  its  questionable  character.''^* 

Early  in  the  session  the  Hastings  and  Dakota  railroad  com- 
pany applied  for  an  extension  of  time  for  the  completion  of  its 
road  and  soon  found  itself  in  hot  water.^®'  It  Avas  charged 
that  the  large  stockholders  had  gobbled  up  the  smaller  ones 
and  issued  to  themselves  preferred  stock  which  rendered  ut- 
terly worthless  the  common  stock  held  by  the  original  Hast- 
ings stockholders.^°^  The  city  of  Hastings  had  given  a  liberal 
l)onus  to  the  railroad  company,  but  found  itself  discriminated 
against.  Shakopee  also  was  in  arms.  The  legislature  had  re- 
quired the  company  to  run  its  line  of  road  through  Shakopee ; 
])ut  as  there  Avas  a  township  as  well  as  a  city  named  Shakopee, 
the  railroad  company  insisted  that  it  could  satisfy  the  legal 
requirements  by  passing  through  Shakopee  township.  Senator 
]\IacDonald,  however,  managed  to  introduce  and  rush  through 
l)oth  houses  of  the  legislature  a  bill  changing  the  name  of 
Shakopee  township  to  Jackson.''^^  It  was  believed  tliat  this 
measure  would  compel  the  company  to  pass  its  line  through 
the  city  of  Shakopee. 

The  railroad  company  found  it  expedient  to  make  conces- 
sions. Arrangements  were  made  whereby  its  old  stock  was 
placed  upon  an  equality  with  the  new  preferred  stock.  Prac- 
tically all  opposition  now  vanished,  and  a  bill  was  passed  grant- 
ing the  desired  time  extension."^* 

In  the  later  sixties  a  number  of  railroad  enactments  had 
reserved  to  the  legislature  the  "right  to  regulate  the  price  of 
freight  and  fare."  When  a  similar  provision  was  inserted  in 
a  proposed  amendment  to  the  Minnesota  "Western  charter,  it 
was  violently  attacked  by  some  of  the  anti-monopolists.  Mr. 
Jones  of  Olmsted  county  strongly  insisted  that  this  right  ex- 
isted independently  of  such  express  provision,  and  contended 
that  if  inserted  it  would  virtually  concede  that  the  right  de- 
pended on  its  insertion  and  would  thus  place  the  friends  of 


394.  See  foregoing  Chapter  IV,   p.   4  2. 

395.  St.  Paul  DaUy  Dispatch,  Jan.  24,   1871,  p.   1.  c.   2. 

396.  Ibid..  Jan.  20,   1871,  p.  4,   c.   1. 

397.  Ibid.,  Jan.  24,  1871,  p.  1,  c.  2;  Special  Laws,  1S71.  ch.  91.  p.  395. 

398.  Special  Laws,  ch.  63. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  »» 

legislative  control  in  a  false  liglit."^®"  The  provision  was  finally 
omitted. ^"°  Formerly  it  had  heen  regarded  as  a  safeguard  of 
the  rights  of  the  people,  but  in  tliis  session  it  was  characterized 
as  stale,  fiat  and  unprofitable,  ancient  and  worn  out. 

Hut,  strangely  enough,  the  legislature  made  use  of  another 
l)rovision  to  secure  reasonable  rates  and  service  without  dis- 
crimination. A  number  of  enactments  gave  certain  railroad 
companies  special  privileges  or  grants  on  the  express  condition 
that  proper  connections  should  be  made  at  points  of  intersec- 
tion with  other  railroads,  and  that  freight  should  be  received 
at  such  junctions  and  transported  at  rates  not  exceeding  the 
lowest  rates  charged  on  any  portion  of  their  lines  for  corre- 
sponding distances,  and  not  to  exceed  the  lowest  average  rate 
of  the  railroads  of  the  state  for  similar  distances ;  cars  of  con- 
necting railroads  were  to  be  transported  at  rates  allowed  by 
common  usage  for  exchange  of  car  service  from  time  to  time ; 
no  discrimination  was  to  be  made  in  favor  of  or  against  any 
locality,  person,  or  connecting  railroad. *°^  One  would  have 
expected  this  legislature  to  pass  a  general  law  to  this  effect, 
rather  than  to  revert  to  the  old  practice  of  attempted  general 
legislation  by  uniform  special  enactments. 

Formerly  territorial  charters  had  at  times  been  revived  and 
continued  in  an  amended  form,  thus  evading  the  general  in- 
corporation law.  The  legislature  of  1871  passed  a  similar  act, 
but  it  was  prouiptly  vetoed  by  the  governor,  who  refused  to 
sanction  the  revival  of  an  old  territorial  charter  *°-  under  which 
the  incorporators  could  claim  exemption  from  effective  state 
control.*"'^ 

Governor  Austin  was  fearless  in  his  use  of  the  veto  i)ower, 
and  proved  himself  faithful  to  his  campaign  pledges.  Though 
the  legislature  might  waver  and  pass  laws  under  questionable 
influence,  the  people  found  tluit  they  coiUd  depend  on  their 
governor  to  do  what  he  believed  to  be  right. 


399.  St.  Paul  Daily  Dispatch,  Feb.  1,  1871,  p. -4,  c.  5;  practically  so 
held  later  (1876)  in  Winona  and  St.  Peter  Railroad  Company 
vs.   Blake,    94   U.   S.,    180. 

400.  See  Special  Laws,  1871,  ch.  71,   p.  278. 

401.  Special  Laws  of  Minn.,  1871,  ch.  63,  sec.  3;  ch.  64,  sec.  3;  ch. 
66,  sec.  5;  ch.   67.  sec.   2;  ch.   70,  sec.  2;  ch.   71,  sec.  2. 

402.  That  of  No.   9,  Special  Laws,  18.56,  ch.   159. 

403.  St.   Paul   Daily  Dispatch,   March   7,   1871,   p.    4,   c.    6. 


100  MINNESOTA   HISTOIUCAL   SOCIETY    COLLECTIONS. 

It  was  not  until  tlie  Icjiislatui'e  lind  Ix'en  in  session  for  soino 
time  tliat  the  Senate  i)roi)osed  a  joint  committee  to  investigate 
tlie  alleged  railroad  abuses.  By  joint  resolution  this  commit- 
tee, to  be  composed  of  three  members  from  the  Senate  and  live 
from  the  House,  was  to  investigate  and  report  to  the  legis-. 
lature  then  in  session  on  the  following  points : 

1.  The  amount  and  probable  value  of  lands  held  by  the 
railroads  for  other  than  railroad  purposes. 

2.  The  amount  and  probable  value  of  all  other  real  pi-op- 
erty  so  held. 

3.  The  amount  and  pi'obable  value  of  all  {)ersonal  prop- 
erty so  held. 

4.  The  annual  gross  earnings  and  necessary  operating 
expenses. 

5.  The  rates  charged  for  freight,  passenger,  and  elevator 
service. 

6.  The  number  of  acres  sold  or  contracted  to  l)e  sold,  and 
the  average  price  per  acre. 

7.  The  cost  per  mile  of  construction  and  maintenance  of 
railroads. 

8.  "Whether  there  is  any  discrimination  against  individuals 
or  localities. 

9.  All  other  facts  the  committee  may  deem  proper  and 
necessary  information  for  the  legislature. 

In  making  its  investigations  the  committee  was  given  full 
power  to  send  for  persons  and  j^apers.^"* 

It  was  impossil)le  for  them  to  investigate  and  report  on 
the  whole  field  assigned  them  in  so  sliort  a  time;  and  so,  con- 
trary to  the  expectation  of  those  who  did  not  wish  foi'  any 
particular  results,  they  devoted  most  of  tlieir  time  to  hearing 
the  testimony  of  those  Avho  claimed  to  have  suffered  wrongs, 
and  instituted  an  investigation  for  their  benefit.  Six  railroad 
companies  were  investigated.^""' 

The  testimony  taken  in  regard  to  the  Winona  and  St.  Peter 
railroad  company  went  to  sliow  that  there  were  discriminations 
in  favor  of  individuals  and  of  certain  points  along  the  line,  and 

404.  St.  Paul  Daily  Pres.s,  Feb.  16,  1871,  p.  1,  c.  1;  Committee  Report. 

405.  Namely,  St.  Paul  and  Pacific,  Milwaukee  and  St.  Paul,  Lake 
Superior  and  Miississipj)!,  St.  Paul  and  Sioux  City,  Winona  and 
St.  Peter,  and  Southern  Minnesota  railrciad  companies. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  101 

that  tlie  managoinent  of  its  railroads  was  exasperating  to  the 
farmers  and  ruinous  to  independent  wheat  dealers.  The 
"rings"  were  given  special  rebates.  One  rnember  of  such  a 
"ring"  testified  that  he  was  charged  a  net  twelve  cents  per 
bushel  when  the  regular  rate  was  fifteen  cents,  but  he  tried  to 
justify  the  system  by  claiming  that  he  gave  the  farmers  the 
benefit  of  the  rebate.  A  miller  and  buyer  likewise  testified 
that  the  policy  was  injurious  to  the  other  buyers  but  was  a 
benefit  to  the  producers.  The  Winona  and  St.  Peter  railroad 
company  owned  most  of  the  elevators  along  its  lines. 

Several  witnesses  were  examined  with  reference  to  the  St. 
Paul  and  Sioux  City  railroad  company,  but  nothing  was  elicited 
to  sustain  any  charges  of  discrimination  in  rates  or  of  unfair 
management  of  its  elevators.  The  company  owned  and  con- 
trolled the  elevators  along  its  line  and  made  no  elevator 
charges. 

On  the  St.  Paul  and  Pacific  the  elevators  were  owned  by 
individuals  or  corporations  with  whom  the  railroad  company 
had  special  contracts,  giving  them  exclusive  rights  and  allow- 
ing them  from  two  to  three  cents  a  bushel  for  handling  the 
grain.  This  railroad  company  also  carried  wood  much  cheaper 
for  parties  witli  whom  they  had  special  contracts,  which  vir- 
tually prevented  others  from  shipping  wood  over  their  lines. 
There  were  also  complaints  against  the  freight  charges  of  this 
railroad  company.  One  man  testified  that  he  found  it  cheaper 
to  haul  his  flour  from  Minnetonka  City  to  ^Minneapolis  in  win- 
ter than  to  ship  it  by  rail.  A  merchant  in  Anoka  testified  that 
he  hauled  his  goods  from  Minneapolis  by  team  when  pur- 
chased in  considerable   quantities. 

The  committee  agreed  with  Governor  Austin  in  regarding 
competition  an  insufficient  remedy  for  railroad  al)uses.  In  the 
first  place  only  points  of  intersection  and  places  near  l)y  would 
be  benefited,  and  secondly  the  "tendency  toward  consoli-dation 
and  confederation  is  almost  sure  to  ])ring  lines  built  as  com- 
peting under  one  management  or  an  agreed  uniform  scale  of 
rates,  that  extinguishes  all  competition  and  in  the  long  run 
compels  the  people  to  expend  in  overcharges  all  and  more  than 
has  been  saved  from  cheap  rates  in  times  of  the  most  active 
rivalry. ' ' 


102  MINNESOTA    HISTORICAL    SOCIETY    COLLECTIONS. 

The  coinuiittee  called  attention  to  the  fact  tliat  there  was 
no  longer  in  any  one  state  an  independent  railroad  system. 
IMinnesota  farmers  were  vitally  affected  by  the  combination 
of  New  York  and  Pennsylvania  railroads  that  had  previously 
been  competitors.*"^  "It  is  clear,"  says  the  committee  in  its 
report,  "that  state  lines  have  been  obliterated  by  this  process, 
that  in  very  many  instances  the  power  which  it  is  desired  to 
control  exists  and  operates  l)eyond  tlie  jurisdiction  of  the 
state."  Tlie  committee  had  realized  tliis  quite  forcibly  when 
they  came  to  investigate  the  Minnesota  Central,  for  they  found 
that  it  had  passed  nnder  the  control  of  a  Wisconsin  corpora- 
tion, and  its  officers  were  therefore  beyond  the  limits  of  tlie 
state  and  not  su])ject  to  their  subpoena. 

The  committee  had  found  a  disposition  among  many  to 
believe  that  tlie  railroad  problem  could  only  be  solved  by  the 
federal  government  in  the  exercise  of  its  constitutional  power 
to  regulate  commerce  among  tlie  different  states. ^'^^  This  had 
been  proposed  repeatedly  in  the  preceding  campaign,  espe- 
cially by  speakers  on  the  Republican  stump. ^''^  The  committee, 
however,  regarded  this  as  a  source  of  relief  which  should  not 
be  sought  until  all  other  means  were  exhausted. 

As  a  partial  remedy  for  the  grievances  complained  of,  and, 
if  possible,  to  prevent  the  recurrence  of  such  grievances,  the 
committee  recommended  that  a  railroad  commissioner  be  ap- 
pointed ;  and  they  reported  favorably  on  a  Senate  bill  provid- 
ing for  the  appointment  of  such  a  commissioner  and  prescrib- 
ing his  duties.  They  further  recommended  the  enactment  of 
a  law  regulating  the  freight  and  passenger  tariffs  on  all  the 
railroads  of  the  state.  The  report  of  the  committee  was  laid 
before  the  senate  February  15 ;  and  five  thousand  copies  of  the 
report,  including  all  evidence  and  statistics  gathered,  were 
ordered  printed  for  the  use  of  the  legislature.*"'^ 

The  fSt.  Paul  Daily  Press  comments  on  this  report:     "The 


406.  St.  Paul  Dispatch,  Dec.  22,  18  70,  p.  1,  c.  4,  and  Dec.  29,  1870,  p. 
4,  0.  5,  tell  of  pools  formed  by  Eastern  trunk  lines,  after  which 
rates  on  Western  bound  freights  were  raised  ten  per  cent. 

407.  See  Winona  county  Republican  i>latforin,  St.  Charles  Herald, 
Oct.    21,    1870,    p.    2,   c.    1. 

408.  For  instance,  Mr.  Stearns;  Rocliester  Post,  Nov.  5,  1870,  p.  2, 
c.  3. 

409.  House  Journal,  1871,  p.   166. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  103 

report  is  rather  a  statement  of  facts,  or  ratlier  of  the  testi- 
mony elicited  by  the  investigation,  tlian  of  conclusions  founded 
upon  evidence,  wliich  in  fact  formed  no  part  of  the  duties  of 
the  committee."  *^°  The  Minneapolis  Tribune  did  not  consider 
the  report  worth  the  paper  on  which  it  was  written,  because 
too  little  time  had  been  given  for  a  thorough  investigation,  and 
expressed  the  hope  that  the  legislature  would  not  stultify  itself 
by  attempting  to  pass  such  a  bill  during  the  short  remnant  of 
that  session,  because  both  time  and  material  were  wanting  and 
any  hasty  legislation  on  such  an  important  and  intricate  mat- 
ter would  be  sure  to  be  many  times  worse  than  nothing."' 

Many  who  sincerely  favored  a  thorough-going  reform  real- 
ized the  need  of  more  time  in  which  to  grapple  with  the  com- 
plicated problem.  A  number  were  in  favor  of  appointing  a 
temporary  board  of  railroad  commissioners  to  continue  inves- 
tigations and  report  their  conclusions  to  the  next  legislature. 
Others,  however,  were  anxious  for  immediate  action.  Their 
constituents  were  clamoring  for  legislation.  To  them  this  pro- 
crastination was  a  clear  indication  tliat  their  representatives 
were  being  won  over  by  the  "monopolists."  Said  the  Owa- 
tonna  Journal:  "Do  those  legislators  who  left  the  people  brim 
full  of  virtuous  indignation  at  these  things,  who  went  breath- 
ing out  'threatenings  and  slaughter'  against  the  perpetrators 
of  the  wrongs  they  suffer,  whose  indignation  has  been  turned 
to  reconciliation  and  whose  threatenings  have  been  changed 
to  gentle  cooing  of  sucking  doves,  hope  to  come  back  to  their 
constituents  with  honeyed  words  and  ingeniously  constructed 
lies,  to  palliate  this  offense  of  confidence  violated,  sacred  trust 
betrayed  and  hope  deferred,  while  aiding  the  riveting  still 
tighter  the  chains  and  adding  to  the  power  by  which  they  are 
held  in  bondage  to  these  corporations  which  are  sapping  the 
life-blood  of  the  people  to  enrich  themselves?"*'^ 

The  legislature  finally  passed  an  act  creating  the  office  of 
railroad  commissioner.*''^  This  commissioner  was  authorized  to 
investigate  railroads  and  their  operations,  their  pecuniary  con- 
dition and  financial  management,  and  to  report  annually  to 

410.  St.  Paul  Daily  Press,  Feb.  16,  1871,  p.  1,  c.  3. 

411.  Minneapolis  Daily  Tribune,  Feb.  17,   1871,  p.  1,  c.   2. 

412.  Owatonna  Journal,  Feb.   9,   1871,   p.  2,  c.   1. 

413.  General  Laws,  1871,  ch.  22;  approved  Mch.  4,  1871. 


104  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

the  legislature.  Tliut  the  eoiuniissionei-  might  be  enabled  to 
perform  these  duties,  it  was  made  a  felony  for  officers  of  rail- 
road companies  to  neglect  sending  in  annual  reports  in  such 
form  and  at  such  a  time  as  the  commissioner  might  prescribe. 
It  was  likewise  made  a  felony  for  any  one  to  wilfully  obstruct, 
hinder  and  impede  the  commissioner  in  the  performance  of  his 
duties.  lie  was  empowered  to  issue  su))poenas,  administer 
oatlis  and  compel  obedience  in  the  same  manner  as  woidd  a 
court  of  laAV.  All  the  books,  papers  and  documents  of  railroad 
companies  were  to  ])e  open  to  his  insi)eetion. 

This  act  can  hardly  be  called  a  Granger  law.  Tlie  railroad 
commission  or  commissioner  idea  did  not  originate  in  the  so- 
called  Granger  states.  It  had  been  adopted  in  a  number  of 
states  for  different  purposes. 

The  general  assembly  in  Rhode  Island  in  1839  passed  an  act 
to  establish  railroad  commissioners.'^' ■*  According  to  the  pro- 
visions of  this  act,  the  general  assembly  was  to  appoint  a  board 
of  railroad  commissioners  consisting  of  not  less  than  three 
members.  It  was  the  duty  of  this  board  upon  complaint  or 
otherwise  to  examine  into  the  transactions  and  proceedings  of 
an}^  railroad  corporation  in  order  to  secure  to  all  citizens  of  the 
state  the  full  and  equal  privileges  of  the  transportation  of  per- 
sons and  property  at  all  times,  that  might  be  granted  directly 
or  indirectly  by  any  such  corporation  to  the  citizens  of  other 
states,  and  "ratiably  in  proportion  to  the  distance  any  such 
persons  or  property  may  be  transported  on  any  railroad  as 
aforesaid."  The  board  was  given  full  power  to  send  for  per- 
sons and  papers  and  to  examine  under  oath.  It  was  required 
to  report  as  often  as  twice  a  j^ear  to  the  general  assembly  on 
such  matters  as  public  interest  might  require. 

In  1844  New  Hampshire  passed  "An  act  to  render  railroad 
corporations  public  in  certain  cases  and  constituting  a  board 
of  Railroad  Commissioners."  This  commission  was  authorized 
to  investigate  and  report  on  the  public  utility  of  proposed  rail- 
roads. "Where  expropriation  rights  were  granted,  the  com- 
mission, in  conjunction  with   the   road  couunissioners  in  the 


414.      Public  Laws   of   Rhode   Island.    Isnii-lO,   p.    1087:   act    of  .Tune   14. 
1839. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  105 

different  eoiuitios,  would  assess  the  damage  done  to  private 
property/'"' 

In  1853  the  Connecticut  legislature  passed  an  act  "to  pre- 
vent injuries  and  the  destruction  of  life  upon  railroads  and 
railroad  trains."  which  i)rovided  for  an  appointive  railroad 
commission.  Tliis  commission  was  given  only  investigating 
and  advisory  powers.^"^ 

Two  years  later  New  York  established  a  ])oard  of  tliree  rail- 
road commissioners  to  consist  of  the  state  engineer  and  sur- 
veyor, ex  officio,  one  person  to  he  selected  by  the  stock  and 
bondholders  of  all  the  railroads,  and  the  tliird  to  be  ai)pointed 
by  the  governor.  The  board  was  authorized  to  report  to  the 
attorney  general  illegal  acts  and  irregularities  on  the  part  of 
the  railroad  corporations.  In  their  regular  reports  to  the  leg- 
islature, they  Avere  to  suggest  additional  legislation  to  secure 
to  the  public  greater  safely  and  benefit  in  the  use  of  the  rail- 
roads.*^" 

In  1858  Maine  enacted  a  law  "to  secure  the  safety  and  con- 
venience of  travelers  on  railroads."  An  appointive  railroad 
commission  was  established,  whose  main  duty  was  to  examine 
into  the  condition  of  the  railroads,  their  rolling  stock,  speed 
of  trains,  time  tables,  rates,  and  connections.*^^ 

Ohio  had  all  along  been  taking  an  advanced  position  in  the 
line  of  railroad  regulation.  In  1867  the  legislature  of  Ohio 
passed  an  act  "to  provide  for  the  appointment  of  a  commis- 
sioner of  railroads  and  telegraphs,  and  to  prescribe  his  du- 
ties."*'^ The  commissioner  Avas  authorized  to  investigate  com- 
plaints and  prosecute  all  violations  of  any  of  the  laAvs  relating 
to  railways,  to  examine  into  the  condition  of  railroads,  and 
to  order  repairs  when  necessary.  Detailed  reports  were  re- 
quired of  the  railroad  companies,  and  the  commissioner  in  turn 
was  directed  to  report  annually  to  the  governor. 

In  1869  ^Massachusetts  established  an  appointive  l)oard  of 
railroad  commissioners  to  have  general  supervision  of  all  rail- 
roads within  tlie  state.     Tlieir  powers  were   in  the  main  ad- 


415.  Laws   of   N.   H.,   Nov.    session,    1844,    ch.    128. 

416.  Public  Laws  of  Conn.,  1853,  ch.  74. 

417.  Laws  of  N.  Y.,   1855,  ch.   526. 

418.  Public  Laws  of  Maine,    1858,   ch.   36. 
4i;t.  Laws  of  Ohio,   vol.   64,   1867,  p.   111. 


106 


MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 


visory/-"  Section  twelve  of  the  JMinnesota  act  requiring  the 
investigation  of  accidents  resulting  in  personal  injury  or  loss 
of  life  is  verbatim  like  section  fourteen  of  the  Massachusetts 
law. 

The  law  which  evidently  served  as  a  model  for  the  ]\Iinne- 
sota  act,  however,  was  that  passed  by  the  legislature  of  Ver- 
mont in  1855,^-'  most  of  it  being  verbatim  the  same.  The  chief 
differences  are  that  in  Vermont  the  railroad  commissioner  was 
to  be  appointed  by  the  judges  of  the  supreme  court,  while  in 
Minnesota  he  was  to  be  appointed  by  the  governor.  In  both 
cases  the  salary  was  to  be  paid  out  of  the  state  treasury,  but  in 
Vermont  the  salary  and  expenses  were  to  be  apportioned  among 
the  railroad  companies  in  proportion  to  the  expense  incurred 
and  the  time  spent  on  each.  The  penalties  provided  for  in  the 
Minnesota  act  are  more  stringent  than  those  of  its  model. 

The  real  Granger  law  of  this  session  was  passed  shortly 
before  adjournment, — the  so-called  Jones  Kailroad  Bill.*-- 
This  was  an  act  to  regulate  the  carrying  of  freight  and  pas- 
sengers on  all  railroads  in  JMinnesota,  and  it  passed  both 
Houses  by  a  large  majority.  In  the  Senate  only  four  voted 
against  it.*-'*  By  this  act  freight  was  classitied,  and  maximum 
legal  freight  charges  were  fixed  as  follows  :*-* 


Classes  op  Fbeight. 


20  miles  or 
less. 


20-50  miles. 


50-100 

miles. 


Over  100      Less  than 
miles.      carloiid  lots 


4c  per  ton  3'^c  per  ton  20^  more, 
per  mile,      per  mile. 


1      All  kinds  of  grain,     6c  per  ton  mile,      5c  per  ton 
potatoes,  flour,  meal,       car  load  lots.  per  mile, 

beef,  pork,  and  meats 
of  all  kinds. 

2.  Sawed  timber,  lum-     $10  per  car  load    18c  extra  per      13c  extra,      lie  extra.    20;t  more 
ber,  lath,  shingles,        of  20,000  lbs.        car  load  per 

coal,  and  salt.  mile. 

3.  Dry  goods  and  other 

mdse.,  usually  called     25%  more  than  Class  1. 
first  class. 

4.  Sugar  in    barrels     Same  rates  as  Class  1. 
and    fourth  cl  iss 

freight. 

5.  Wood,  less  than  35  miles,  19.00  per  car  load  of  not  less  than  6  cords. 

35-60  miles,  18c  extra  per  cur  load  per  mile. 

60  miles  and  over,  13c  extra  per  car  load  per  mile. 

The  railroad  companies  w^ere  authorized  to  charge  five  cents 

420.  Laws  of  Mass.,   1869,  ch.   408. 

421.  Public  Acts  of  Vermont,   1855,   No.   26. 

422.  General  Laws  of  Minn.,   1871,  ch.   24,  approved  March   6,   1871. 

423.  St.  Paul  Daily  Pioneer,  March  2,  1871,  p.  1,  c.  1. 

424.  General   Laws    of   Minn.,    1871,    ch.    24,    .sec.    1.    .summarized    and 
tabulated. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  107 

a  mile  for  carrying  passengers/-"'  Tliesc  charges  for  freight 
and  passenger  service  were  dechired  to  be  the  maxiiuuin  of 
reasonable  rates.''-'" 

Under  the  general  railroad  ineori)oration  law  of  1858  ^''^  and 
the  General  Statutes  of  ISGG/-*  railroads  were  permitted  to 
charge  only  a  maxiiiunn  of  three  cents  a  mile  for  passengers, 
and  five  cents  per  ton-mile  for  freight  transported  thirty  miles 
or  more.  Tliese  provisions  liad  been  repealed  in  1869,  and  rail- 
roads incorporated  under  the  general  law  were  permitted  to 
charge  such  reasonable  rates  as  might  from  time  to  time  be 
fixed  by  the  corporation  or  prescribed  by  law.'*-^ 

All  railroads  in  the  state  without  exception  "were  by  the 
new  laAV  declared  to  be  pu])lic  highwaj^s,  and  therefore  all  per- 
sons had  the  right  to  service  at  reasonable  rates. *•'"  No  addi- 
tional charges  were  allowed  for  handling,  transferring  or  stor- 
ing freight,  excepting  a  reasonable  storage  charge  on  all 
freights  kept  for  a  longer  period  than  two  days  after  notice 
had  been  given  the  consignee.*-'^  When  freight  was  carried 
over  two  or  more  lines,  the  rates  were  to  be  the  same  as  would 

have  been  charged  if  the  goods  were  carried  over  only  one 
line.^^2 

It  was  made  the  duty  of  all  railroad  companies  in  the  state 
to  receive  all  kinds  of  freight  at  any  depot  or  station,  what- 
ever brought  for  transportation,  and  to  provide  suitable  places 
for  the  reception  and  storage  of  such  freight. '^^  Equal  facili- 
ties for  shipment  were  to  be  furnished  all  shippers,^''*  and  all 
freight  to  be  transported  without  discrimination  within  a  rea- 
sonable time  and  in  the  order  reeeived.*^^  No  discrimination 
in  favor  of  any  warehouse  or  elevator  was  allowed;'*'"'  and  if 
freight  Avere  carried  for  any  one  at  less  than  the  maximum 


425.  Ibid.,   sec.   2. 

426.  Ibid.,   sec.   9. 

427.  General     Laws   of  Minn.,   1858,   eh.    70,   .sec.    12. 

428.  General  Statute.s  of  Minn.,  Revision,  1866,  eh.  34,  title  I,  sec.  35. 

429.  General  Laws  of  Minn.,   1869,   ch.   78,   sees.   2  and   3. 

430.  General  Laws  of  Minn.,   187],  ch.  24,   sec.   8. 

431.  Ibid.,  sec.   8. 

432.  Ibid.,   sec.   6. 

433.  Ibid.,   sec.   4. 

434.  Ibid.,   sec.   4. 

435.  Ibid.,   sec.   7. 

436.  Ibid.,  sec.  4. 


108  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

legal  rates,  the  railroad  company  was  obliged  to  transport 
freights  of  the  same  description  for  all  other  persons  at  the 
same  reduced  rates  (lurin<:]j  tlie  time  such  discrimination  was  in 
force.*" 

If  any  railroad  company  failed  to  c()ni[)ly  with  any  of  the 
requirements  of  this  act,  the  aggrieved  party  was  entitled  to 
one  thousand  dollars  damages  to  be  recovered  in  civil  action, 
the  company  paying  tlie  costs/''^  l^csides  this,  demanding  or 
receiving  higher  rates  than  the  legal  maximum  I'ates  was  to  be 
deemed  a  misuser  of  charter  powers;  and,  on  receiving  proper 
evidence,  the  attorney  general  must  proceed  against  the  rail- 
road company  for  the  forfeiture  of  its  charter  and  franchises, 
or  for  the  collection  of  a  fine  not  exceeding  one  thousand  dol- 
lars for  each  violation  of  tlie  provisions  of  the  act,  at  the  dis- 
cretion of  the  court  trying  the  case.*"'^ 

The  evident  intent  of  the  act  was  to  prevent  discrimination 
of  all  kinds  against  which  the  people  had  risen  in  revolt.  If 
all  railroads  were  public  highways  and  all  railroad  companies 
common  carriers,  it  followed  as  a  corollary,  in  the  minds  of  the 
legislators,  that  they  had  a  legal  right  to  i)rescri])e  rates  for 
all.  Disregarding  the  Dartmouth  College  decision,  the  legis- 
lature asserted  its  autliority  to  determine  what  was  the  max- 
imum of  legal  rates  for  all  railroads,  without  making  any  dis- 
tinction between  those  organized  under  special  law  and  those 
incorporated  under  the  general  incori)oration  law.  This  is 
the  radical  departure  from  previous  legislation,  and  it  stami)s 
the  act  under  discussion  as  a  Granger  law. 

We  have  already  referred  to  the  main  provision  concern- 
ing railroads  embodied  in  the  Illinois  constitution  of  1870.  It 
had  there  been  considered  necessary,  or  at  least  expedient,  to 
authorize  the  legislature  to  fix  maximum  legal  rates  for  all 
railroads. ^^°  jNIichigan  had  in  the  same  year  amended  its  con- 
stitution^^' so  as  to  give  its  legislature    this    power  ^^-    and    to 


437.  Ibid.,   sec.   7. 

438.  Ibid.,   sec.   8. 

439.  Ibid.,   sec.   9. 

440.  Const,   of  Ills.    (1S70),   Art.  XI,    sec.    12. 

441.  Laws  of  Mich.,    1S70,    Extra  ses.'^ion.   Joint   Res.   No.   1,    proposed 
amends. 

442.  Const,   of  Mich.,   Art.    19A,    Of   Railroad.^    sec.    1. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  109 

proliibit  the  consolidation  of  parallel  and  competing  lines.**'' 
Governor  Austin,  as  we  have  seen,  recommended  "constitu- 
tional enactment  and  ap|)ro[)riate  legislation"  to  the  legisla- 
ture of  .Minnesota,  but  this  body  was  convinced  of  its  powers 
to  regulate  railroad  rates  on  common  law  principles,  without 
express  constitutional  authority.  In  this  resjiect  it  was  more 
radical  than  the  (irangers  of  Illinois  and  Michigan. 

The  peo{)le  of  Minnesota  had  failed  in  their  attempt  to  leg- 
islate railroads  into  existence,  and  they  likewise  encountered 
difficulty  in  legislating  them  into  submission.  Under  the  cir- 
cumstances, a  h\w  satisfactory  to  all  parties  would  have  been 
inconceivable.  Before  the  ])assage  of  the  Jones  Railroad  Bill, 
the  Owatonna  Journal  characterized  it  as  an  incongruous, 
blundering  affair,  which  looked  vei-y  nmcli  as  though  some 
one  other  than  a  friend  of  real  progress  had  figured  in  its  con- 
struction.*** On  tlu'  other  hand,  the  Federal  Union  (Roch- 
ester), another  railroad  reform  paj^er,  expressed  confidence  in 
the  new  law  and  considei'ed  its  enactment  the  fulfilment  of  the 
pledge  of  the  democracy  of  Olmsted  county.**"'  The  St.  Paul 
Daily  Pioneer  commented  on  the  enactment  of  the  new  law  in 
the  following  words:  "The  bill  knoAvn  as  the  Jones  Railroad 
Bill  to  regulate  the  rates  for  carrying  freight  and  passengers 
by  railroads  in  this  state  went  through  the  senate  with  a  rush, 
only  four  senators  having  the  nerve  to  vote  against  it."**" 
As  a  ride,  the  newspa})ers  of  the  state  had  very  little  to  say 
about  the  new  law. 

In  his  first  communication  to  the  legislature,  the  railroad 
commissioner,  A.  J.  Edgerton,  reported  that  the  railroads  with- 
out exception  had  refused  to  comply  with  the  law,**'  Imt  con- 
tended that  there  could  be  no  doubt  that  the  legislation  had 
been  beneficial,  because,  directly  or  indirectly,  it  had  caused  a 
great  reduction  in  the  price  of  transportation.**"^ 

It  was  not  long  before  a  case  was  brought  l)efore  tlie  courts 
to  test  the  constitutionalitv  of  the  law.     John   D.  Blake  and 


443.  Ibid.,   sec.   2. 

444.  Owatonna  Journal,  March   2,   1871,   p.   2,  c.   2. 

445.  Federal   Union,   March    11,   1871,   p.    5,   c.    3. 

446.  St.   Paul   Daily   Pioneer,   March   2,   1871,    p.    1.   c.    1. 

447.  Railroad    Commissioner's   Report,    1871,    \>.    lo. 

448.  Ibid.,  p.  28. 


110  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

others  l)roiight  action  against  tlie  AYinona  and  St.  Peter  rail- 
road company  in  the  district  court  for  Olmsted  county,  for 
refusal  on  the  ])art  of  the  defendant  to  deliver  certain  freight 
on  tender  of  payment  according  to  rates  fixed  ])y  law.  The 
court  decided  in  favor  of  the  defendant,  holding  that  the  leg- 
islature had  no  constitutional  power  to  fix  rates.^*^ 

The  case  was  appealed  to  the  state  supreme  court,  which 
reversed  the  decision  of  the  lower  court,  holding  that  the  act 
of  1871  was  valid,  operative,  and  applicable  to  the  defendant 
in  this  case.  In  the  first  place,  the  law  did  not  impair  the 
obligation  of  a  contract  with  the  defendant,  for  the  state  had 
never  expressly  granted  to  the  defendant  the  right  to  charge 
any  toll  for  freight  or  passengers  carried  over  its  road,  and 
its  right  to  demand  compensation  would  depend  upon  the  lan- 
guage of  its  charter,  and  not  upon  the  rules  of  common  law. 
The  court,  assuming  that  the  right  to  take  some  toll  existed 
by  necessary  implication,  believed  that  this  right  could  be  ex- 
ercised to  its  full  extent  under  a  law  fixing  a  maximum  rate. 
Secondly,  the  law  in  question  was  not  a  usurpation  of  judicial 
authority  by  the  legislature,  for  while  the  legislature  repre- 
sents the  sovereign  as  a  party  contracting  with  the  defendant, 
it  also,  in  the  capacity  of  sole  law-making  power,  acts  for  the 
sovereign  in  exercising  the  sovereign  right  of  control  over 
franchises  in  the  hands  of  the  subject. ^''^ 

The  railroad  company  appealed  to  the  federal  supreme 
court,  and  the  case  was  numbered  among  the  Granger  cases.*'^ 
This  court  did  not  base  its  decision  on  a  strict  construction  of 
the  charter  rights  of  the  company,  as  had  the  state  supreme 
court ;  l)ut,  following  the  principles  laid  down  in  INIunn  vs. 
Illinois,  held  that  state  legislatures  had  the  right  under  the 
constitution  to  regulate  intra-state  railroad  rates,  and  to  pro- 
vide penalties  for  violations.  This  decision  Avas  rendered  in 
1876,  some  time  after  the  Granger  movement  had  subsided. 
The  state  had  not  pressed  its  claims  against  any  of  the  other 

449.  See  Blake  et  al.  vs.  The  Winona  and  St.  Peter  Railroad  Com- 
pany,   19   Minn.,   418,   419,   and   420. 

450.  19  Minn.,  418,  (October  term,  1872);  note  pp.  428  and  429  in 
particular;  see  also  State  vs.  Railroad  Company,  19  Minn.,  434; 
Nation,   vol.   17,   p.   266. 

451.  94  U.  S.,  180;  Winona  and  St.  Peter  Railroad  Company  vs. 
Blake. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  Ill 

railroads;  and  wlien  the  final  verdict  was  given  Minnesota  liad 
already  changed  her  railroad  laws  twice  since  the  enactment 
of  the  law  of  1871,  the  constitutionality  of  which  was  upheld. 

CHAPTER  XI. 

RAILROAD  LEGISLATION  IN  1872  AND  1873. 

In  his  message  to  the  legislature  which  met  in  January, 
1872,  Governor  Austin  characterized  the  law  prescribing  max- 
imum legal  freight  and  passenger  rates  as  crude  and  ill-con- 
sidered in  many  of  its  provisions,  affording  but  little  protec- 
tion to  the  agricultural  interests  of  the  state.  He  recom- 
mended a  careful  revision.  But  notwithstanding  its  imperfec- 
tions and  the  fact  that  the  railroad  companies  had  professed 
to  disregard  it,  he  felt  convinced  that  it  had,  in  no  small  de- 
gree, modified  their  charges  and  thus  saved  to  the  people  no 
inconsiderable  sum.  He  commended  the  work  of  the  railroad 
commissioner  very  highly,  and  approved  of  his  recommenda- 
tions.^^^ 

The  legislature  of  1871,  as  we  have  seen,  created  the  office 
of  railroad  commissioner,  but  it  had  neglected  to  make  appro- 
priations for  his  salary  and  necessary  expenses.  It  was  feared 
at  the  time  by  many  friends  of  reform  that  the  act  might  for 
this  reason  fail  to  become  operative.*"''  But  General  Edgerton, 
Governor  Austin's  appointee,  immediately  entered  upon  his 
duties  and  the  following  legislature  made  the  expected  appro- 
priation *^*  and  provided  him  with  a  contingent  fund  for  the 
year  1872.*^^     The  office  was  not  to  perish  for  want  of  funds. 

The  report  of  the  railroad  commissioner,  made  directly  to 
the  legislature  as  required  by  laAV,  shows  plainly  that  he  real- 
ized the  responsibility  of  his  position,  and  that,  while  thor- 
oughly in  sympathy  with  the  movement  for  railroad  regula- 
tion, he  wished  to  conduct  his  investigations  impartially  and 
reach  conclusions  supported  by  facts. 

As  to  infringement  of  the  laws,  he  reported,  as  we  already 

452.  Minn.   Exec.  Docs.,   1871,   vol.  I,   pp.   17  and   18. 

453.  Rochester  Post,  March   11,   1871,  p.  2,  c.   4. 

454.  General  Laws  of  Minn.,  1872,  ch.  110.     See  Governor's  Message, 
p.   18,   Minn.   Exec.  Docs.,   1871,   vol.  I. 

455.  General  Laws  of  Minn.,   1872,  ch.  100. 


112  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

have  noted,  that  the  railroads  Iiad  all  refused  to  eonforni  to  the 
maxiniuni  freight  and  passenger  rates  preseribed  hy  the  new 
railroad  law,  and  that  the  attorney  general  had  conmieneed 
action  to  test  the  validity  of  this  form  of  legislation.*''" 

He  had  not  yet  had  time  to  make  a  thorough  inspection  of 
the  different  roads,  as  was  contemplated  by  the  law,  but  from 
what  he  had  learned  he  could  report  that  the  different  railroads 
were  very  generally  improving  the  condition  of  their  roads.*'" 

In  discussing  land  grants  made  to  railroads,  he  takes  up 
different  companies  and  estimates  the  value  of  the  land  grants 
and  the  local  aid  rendered  them.*''**  He  reaches  the  conclusion 
that  the  different  railroads  of  the  state  had  received  from  the 
public  no  less  than  fifty  or  sixty  million  dollars,  which  he  re- 
gards as  given  in  trust  that  the  state  may  be  developed  and 
that  its  mineral,  agricultural  and  other  productions  and  man- 
ufactures may  be  transported  to  market  on  equal  and  reason- 
able terms. *'^ 

Great  complaint  had  been  made  against  the  AVinona  and 
St.  Peter  railroad  company  for  making  unjust  discriminations 
against  certain  places. *"°  The  commissioner  entertained  seri- 
ous doubts  as  to  the  effectiveness  of  unregulated  competition 
as  a  remedy  for  such  abuses.  He  believed  that  fair  and  just 
rates  from  all  places  should  be  established  by  law.  Then, 
whenever  the  railroads  cut  rates  to  break  down  competition, 
they  would  have  to  do  so  at  their  own  expense  and  not  at  the 
expense  of  producers  residing  at  a  distance  from  the  com- 
petitive points. **^^  He  was  not  prepared  to  subscribe  to  the 
radical  position  taken  by  certain  members  of  the  Illinois  con- 
stitutional convention  that  the  "right  to  regulate  and  prescribe 
the  terms  of  the  use  of  that  which  has  been  taken  and  is  held 
for  the  public  use"  can  never  be  irrevocably  surrendered  by 
the  legislature  to  any  board  of  directors,  but  he  presented 
their  arguments  and  admitted  that  they  had  much  force. *"- 
He  believed,  however,  that  the  time  would  soon  come  when  the 

456.  Ry.  Commissioner's  Report,   1871,  pp.   10  and   11. 

457.  Ibid.,  pp.   11   and   12. 

458.  Ibid.,  pp.    12-16. 

459.  Ibid.,  p.   39;   see   Const,    of  Minn.,   Art.    X,    sec.    4. 

460.  Ibid.,  p.    17. 

461.  Ibid.,  ]).   20. 

462.  Ibid.,  pp.   32-;i6. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  113 

principle  would  be  recognized  that  the  public  as  well  as  the 
railroad  corporations  have  "vested  rights;"  and  that,  if  such 
unreasonable  rates  are  charged,  or  such  discriminations  made, 
as  would  obstruct  the  necessary  commerce,  or  paralyze  the 
various  industries  of  the  state,  it  is  as  much  the  duty  of  tlie 
legislature  to  interfere  and  remove  such  unjust  obstructions 
as  it  is  the  duty  of  a  court  to  abate  a  nuisance. *°" 

There  was  some  doubt  as  to  the  poAver  of  the  legislature  to 
prescribe  rates  for  all  the  railroads  of  the  state  until  the  courts 
had  decided  certain  pending  cases.  But  four  of  the  principal 
railroads  had  charters  which  expressly  provided  that  freight 
and  passengers  should  be  transported  at  reasonable  rates.  The 
commissioner  believed  that,  if  the  legislature  amended  the  char- 
ters of  these  roads  and  placed  them  under  just  and  whole- 
some restrictions,  of  which  there  could  be  no  doubt  it  had  the 
power,  the  whole  question  would  be  settled ;  for,  when  these 
roads  were  compelled  to  adopt  reasonable  rates  and  cease  un- 
just discriminations,  the  other  roads  would  have  to  fall  in 
line.''^* 

Railroad  lands  were  exempt  from  taxation  until  sold  or 
contracted  to  be  sold.  In  many  counties  the  amount  of  land 
thus  held  by  the  railroads  was  very  large,  and  consequently 
the  burden  of  taxation  fell  heavily  on  the  settlers  and  became 
the  cause  of  much  complaint  and  ill-feeling.  The  commis- 
sioner found  that  in  a  number  of  cases  much  railroad  land  had 
been  contracted  away,  but  on  such  terms  that  the  title  re- 
mained with  the  railroad  company.  These  lands,  therefore, 
were  not  listed  for  taxation.  One  company  had  sold  its  road- 
bed and  equipments,  but  kept  its  land  grant  and  claimed  ex- 
emption from  taxation.  TJie  commissioner  recommended  that 
every  means  should  be  used  to  make  these  lands  subject  to  tax- 
ation as  soon  as  contemplated  by  the  laws  exempting  them.*®^ 

Railroad  companies  were  to  pay  a  certain  annual  tax  or 
per  centum  of  their  gross  earnings.  In  the  past  no  direct  pro- 
vision had  been  made  for  an  examination  into  the  correctness 
of  the  returns  sent  in  by  the  companies.     The  commissioner 


463.  Ibid.,  pp.  39-40. 

464.  Ibid.,  pp.  36-37. 
46.5.  Ibid.,  pp.  21-25. 
8 


114  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

therefore  recommended  tliat  the  companies  be  required  to  send 
in  monthly  statements  of  their  gross  earnings,  and  that  the 
commissioner  sliould  at  least  once  a  year  make  a  personal  in- 
vestigation to  ascertain  the  correctness  of  their  returns.*"" 

Since  the  authority  of  the  legislature  over  special  charter 
railroads  had  not  yet  been  judicially  determined,  it  was  not  to 
be  expected  that  any  important  railroad  legislation  would  be 
enacted  during  the  session.  Governor  Austin  liad  been  nom- 
inated by  acclamation  as  a  candidate  to  succeed  himself,  and 
was  re-elected  by  a  large  majority  in  November.*"^  The  Dem- 
ocrats, during  the  campaign,  had  denounced  the  Republican 
administration  for  its  utter  failure  to  enforce  the  laws  of  the 
state  relating  to  corporations,^"^  but  the  voters  remained  loyal 
to  the  party  in  power.  The  legislature  was  strongly  Republi- 
can and  the  grangers  remained  in  the  ascendancy.  Thirteen 
of  the  forty-one  senators,  and  fifty-three  of  the  one  hundred 
and  six  representatives,  are  listed  as  farmers  in  the  legislative 
handbook  of  1872.*«« 

Few  general  railroad  laws  were  enacted  during  this  ses- 
sion. The  railroad  commissioner  was  required  to  examine  the 
books  and  accounts  of  the  railroad  companies  at  least  once  a 
year  to  ascertain  the  amount  of  gross  earnings  of  each  road. 
An  act  was  passed  to  compel  the  railroads  of  the  state  to  build 
and  maintain  proper  cattle-guards  and  fences  along  their 
line.*^"  Their  failure  to  do  this  in  the  past  had  been  a  source 
of  great  annoyance  and  loss  to  the  farmers,  and  a  law  to  this 
effect  had  been  strongly  urged  hy  the  railroad  commissioner  in 
his  report.*'^ 

But  quite  a  number  of  special  railroad  laws  were  enacted. 
Three  acts  were  passed  giving  companies  the  privilege  of  build- 
ing branch  lines,  with  provision  for  securing  proper  connec- 
tions with  intersecting  roads  and  reasonable  rates  and  services 
without  discrimination.*'^-    These  provisions  were  identical  with 

466.  Ibid.,  pp.   25-26. 

467.  World  Almanac,   1872,   p.   69:     Austin,   46,415;   Young,   31,441. 

468.  St.    Paul    Daily    Pioneer,    Sept.    14,    1871,    p.    4,    c.    2;    Dem.    party 
platform. 

469.  Legislative  Manual  of  the  state  of  Minn.,  1872,  pp.   146-153. 

470.  General  Laws  of  Minn.,    1872,   ch.   26. 

471.  Railroad  Commissioner's  Report,  1871,  pp.   16-17. 

472.  Special  Laws   of  Minfi.,   1872,   chs.   96,   122,   and   124. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  115 

those  wliic'li  we  noted  as  inserted  in  a  number  of  speeial  aets 
hy  the  legislature  in  the  winter  of  1871. *'■' 

Two  other  aets  confer  special  legislative  benefits  on  the 
express  condition  that  tlie  companies  shall  at  all  times  carry 
freight  and  passengers  at  reasonable  rates/"*  while  a  third 
makes  it  a  condition  that  the  railroad  shall  be  subject  to  all 
laws  of  the  state  which  are  general  in  their  nature.'' ''^  An  Iowa 
corporation  was  permitted  to  extend  its  line  into  the  state  on 
condition  that  it  paid  a  three  per  cent  gross  income  tax  to  the 
state  and  charged  such  reasonable  rates  for  tlie  transportation 
of  passengers  and  freight  within  the  state  as  might  be  fixed 
by  the  companj^  or  prescribed  by  general  law.*'**  The  First 
Division  of  the  St.  Paul  and  Pacific  was  authorized  to  build  a 
branch  line  on  condition  that  it  would  carry  freight  and  pas- 
sengers on  this  branch  at  such  reasonable  rates  as  might  from 
time  to  time  be  prescribed  by  laAV.*" 

These  enactments  show  the  determination  of  the  legislature 
to  bring  the  railroads  ojierating  with  special  charters  under 
legislative  control  by  special  agreements,  since  there  was  some 
doul)t  as  yet  as  to  their  amenability  to  the  general  law. 

Two  acts  passed  by  this  legislature  very  liberally  left  blank 
the  maximum  amount  of  common  and  preferred  stock  Avhich 
might  be  issued  in  connection  with  branch  lines. *'^  "What 
Avould  seem  to  be  another  step  l)ackward  in  railroad  legisla- 
tion was  the  revival  of  two  territorial  charters.  The  charter 
of  the  St.  Paul  and  St.  Antliony  railroad  company  *^^  had  been 
revived  and  amended  for  tlie  St.  Paul  street  railway  company 
in  1868.  This  amended  charter  Avas  now  revived  and  further 
amended  by  the  legislature  in  1872.*^°  The  AYinona  and  La 
Crosse  railroad  charter,  granted  in  1856,***^  was  revived  and 
continued  for  a  new  set  of  incorporators.*®'     The  new  corpo- 


473.  Ibid.,   1871,   chs.   63.   64,   66,   67,   70,  and   71. 

474.  Ibid.,   1872,  ch.   93,   sec.   3;  ch.   119,  sec.   2. 

475.  Ibid.,   ch.  100,  sec.   2. 

476.  Ibid.,  ch.   95,   sec.   2. 

477.  Ibid.,  ch.   120,  sec.   1. 

478.  Ibid.,  ch.   96,   sec.   1;   ch.   124,   sec.   2. 

479.  Session  Laws  of  Minn.,  1853,  ch.  12. 

480.  Special  Laws  of  Minn.,   1872,  ch.   112. 

481.  Session  Laws  of  Minn.,   1856.  ch.   159. 

482.  Special  Laws  of  Minn..   1872,   ch.   101. 


116  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

ration  was  to  carry  freight  and  passengers  over  its  road  at  just 
and  reasonable  rates/^" 

At  this  session  an  amendment  to  tlie  constitution  was  pro- 
posed, providing  that  the  legislature  should  not  authorize  any 
iiuinicii)al  cori)oration  to  aid  a  railroad  to  an  amount  exceed- 
ing ten  i)er  cent  of  the  assessed  value  of  the  property  within 
its  ])oundaries/**  This  projxjsed  amendment  was  ratified  by 
popular  vote  in  the  NoviMiiber  following.^-' 

During  the  summer  of  1872  the  presidential  campaign  and 
national  issues  Avere  of  primary  interest  throughout  the  state. 
At  this  time  there  was  in  some  states  eonsideral)le  disagree- 
ment in  the  Republican  ranks  with  reference  to  tlie  tariff,  the 
civil  service,  and  the  administration  reconstruction  policies. 
In  iMissouri  the  dissenting  element,  or  Liberal  Repu])licans, 
gained  control  in  January,  1872.  They  called  a  national  con- 
vention Avhich  met  in  Cincinnati  in  May,  nominated  candi- 
dates for  president  and  vice-president,  and  drew  up  a  plat- 
form embodying  their  main  tenets.  The  Democrats  met  in 
national  convention  in  Baltimore,  July  9,  and  adopted  the  Lib- 
eral Republican  platform  and  candidates.  By  making  this 
coalition  they  hoped  to  defeat  the  administration  Republicans 
in  November. 

In  Minnesota  the  defection  within  the  Republican  party 
was  not  particularly  strong.  The  Republican  state  convention 
met  May  8,  and  in  its  platform  expressed  its  confidence  in  the 
national  administration  and  heartily  endorsed  President  Grant 
for  a  second  term.^^*'  The  three  congressional  district  conven- 
tions followed  suit.**'  In  none  of  these  platforms  was  any 
specific  mention  made  of  railroads.  The  St.  Paul  Dispatch  was 
the  only  prominent  Republican  paper  in  ^linnesota  to  espouse 
the  Liberal  Republican  cause,'***  althougli  tlieir  presidential 
candidate,  Horace  Greeley,  had  been  quite  popular  in  the  state. 

The  opposition  element  in  the  state  united  as  in  the  previ- 

Ibid.,   ch.   101,   sec.    9. 

General    Laws    of   Minn.,    1872,    ch.    13;    Const,    of   Minn.,    Art.    9, 
sec.   14. 

Railroad   Commissioner's   Report,    1872,   p.   39. 
St.   Paul   Daily   Press,  May   9,    1872,   p.   4,   c.   2-3. 
Ibid.,    July    12,    1872,    p.    2,    c.    3,    First   dist.;    July    17,    p.    4,    c.    2, 
Second   dist.;   July   19,   p.   4,   c.    1,   Third   dist. 
488.     SmalU'y,   The  History   of   the   Republican   Party,   p.    193. 


483. 

484. 

485. 

486. 

487. 

RAILROAD  LEGISLATION   IN  MINNESOT^.  117 

ous  campaign  ^**"  and  presented  platforms  denouncing  the  na- 
tional and  state  administration  and  demanding  reform.  They 
caused  quite  a  stir  in  many  parts  of  the  state  hut  the  adminis- 
tration Kepuhlicans  came  out  victorious  in  the  Novemher  elec- 
tion. Grant  received  55,708  votes;  Greeley,  35,211.*"°  The 
Liberals  were  defeated  by  a  large  majority  in  all  three  con- 
gressional districts,  *^^  making  a  good  showing  in  only  a  very 
few  counties.  In  the  state  legislature  the  Repul)licans  made 
gains  over  the  })receding  year,  having  thirty  members  to  tlie 
opposition's  eleven  in  the  Senate,  and  seventy-eight  to  the  op- 
position's twenty-eight  in  the  House.*"-  In  the  summer  and 
fall  of  1872  the  papers  had  very  little  to  say  about  railroad 
abuses.  There  seems  to  have  been  comparatively  little  agita- 
tion, yet  we  find  that  about  as  large  a  proportion  of  farmers 
were  elected  to  the  legislature  as  in  1871.*"-' 

The  St.  Paul  and  Pacific,  Lake  Superior  and  Mississippi  and 
the  Northern  Pacific  railroad  had  a  Railroad  Building  at  the 
State  Fair  in  November,  1872,  and  gave  an  exhibit  of  what 
had  been  raised  on  lands  lying  within  the  limits  of  their  land 
grants.  A  special  committee  appointed  by  the  state  agricul- 
tural society  gave  an  eight  column  report  of  this  exhibit  in  the 
Farmers'  Union,  and  commended  the  railroads  very  highly  on 
their  liberality  and  enterprise  in  bringing  to  public  notice  the 
productiveness  of  their  lands.  In  the  opinion  of  this  commit- 
tee thousands  of  settlers  would  be  attracted  to  the  state,  and 
hundreds  of  thousands  of  dollars  be  invested,  as  a  direct  result 
of  this  exhibition,  which  it  was  hoped  would  become  one  of 
the  prominent  features  of  future  state  fairs.*"* 

When  the  legislature  met  in  January,  1873,  there  seemed 
to  be  no  measures  of  exciting  interest   demanding  action.*"^ 


489.  St.  Paul  Daily  Pioneer,  June  16,  1872,  p.  4,  c.  1;  July  11,  p.  2, 
c.  1;  July  20,  p.  2,  c.  1. 

490.  Smalley,   op.  cit.,  p.   194. 

491.  The  Tribune  Almanac  and  Political  Register,  1873;  First  dist., 
20,371  to  10,841;  Second  dist.,  15,257  to  10,832;  Tliird  dist.,  19,182 
to   12,609. 

492.  The  World  Almanac,   1873,   p.  42. 

493.  Legislative  Manual  of  the  State  of  Minn.,  1873,  pp.  166-171,  12 
farmers  in  the  Senate  and  52  farmers  in  the  House;  St.  Paul 
Daily  Pioneer,   Jan.   10,    1873,   p.   4,   c.   2. 

494.  Farmers'  Union,  Nov.  7,  1872,  pp.  2-3. 

495.  St.  Paul  Daily  Pioneer,  Jan.  7,  1873,  p.  2,  c.  1. 


118  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

The  railroad  eases  were  still  pending,  and  it  was  generally 
understood  that  appeal  would  be  made  to  the  federal  supreme 
court,  if  the  railroads  lost  out  in  the  state  courts.  Under  the 
circumstances  the  prospects  for  immediate  railroad  reform  were 
not  promising. 

The  governor  in  his  message  informed  the  legislature  that 
all  the  companies,  local  and  non-resident,  operating  within  the 
state,  continued  to  disregard  the  maximum  rate  law.^""^  As  an 
intelligent  ])asis  for  judicious  legislation,  he  recommended  the 
appointment  of  an  able  eominittee  to  make  a  searching  and  far 
reacliing  investigation.^'''  lie  favored  making  conspiracy 
against  trade,  or  the  entering  into  a  combination  to  prevent 
com})etition,  an  iudictalile  otfensc  punishable  hy  fine  and  im- 
prisonment; and  in  case  directors  or  managing  officers  were 
convicted,  such  conviction  slioidd  work  tlie  forfeiture  of  the 
franchises  of  the  corporation.*'^^  In  addition  to  necessary  state 
legislation,  he  recommended  that  Congress  be  memorialized  to 
exercise  its  constitutional  prerogative  to  regulate  commerce 
among  the  several  states,  and  ])y  an  act  embracing  the  entire 
system  of  tlie  Union  to  accomplish  wliat  the  several  states  by 
their  discordant  legislation,  their  deficient  legislation,  and  their 
non-legislation,  could  never  accomplish.*^''  The  governor  re- 
commended that  Congress  be  further  memorialized  to  aid  in  the 
construction  of  canals  to  give  continuous  water  communica- 
tion from  the  Mississippi  river  and  its  tributaries  to  the  sea- 
board. He  believed  that  this  was  fully  as  important  to  the 
people  of  the  West  as  the  correction  of  railroad  abuses."'*""  He 
urged  the  farmers  especially  to  profit  by  the  experience  of  the 
trades  unions  and  the  protective  and  co-operative  societies  of 
other  trades  and  calling,  and  to  organize  for  securing  economic 
independence. "^"^ 

The  railroad  commissioner  in  his  report  to  the  legislature 
gave  a  short  summary  of  the  origin  and  progress  of  eacli  road 


496.  St.    Paul    Daily   Pioneer.    Jan.    10,    1873,    p.    2,    c.    2;   Minn.    Exec. 
Docs.,   1872,   vol.   1,   Governor's  Message,   p.   5. 

497.  Ibid.,   p.   8. 

498.  Ibid.,   p.   8. 

499.  Ibid.,   p.   S. 

500.  Ibid.,   1).   S. 

501.  Ibid.,   I).   10. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  119 

already  constructed  or  in  the  process  of  eonstruction."'"-  He 
again  called  attention  to  the  fact  that  much  railroad  land  was 
escaping  just  taxation,  and  urged  the  legislature  to  take  appro- 
priate action. 

As  a  remedy  for  discrimination  against  places  he  recom- 
mended the  enactment  of  a  pro  rata  law  similar  to  that  pro- 
posed by  the  Massachusetts  Commissioners  in  their  report  for 
1870.^°''  The  commissioner  was  convinced  that  discrimina- 
tions, both  against  persons  and  localities,  were  opposed  to  the 
well-defined  principles  of  common  law,  and  claimed  for  the 
state  an  inalienable  police  power  to  prevent  and  restrain  such 
infringement  on  the  rights  of  the  public.'"''** 

The  commissioner  reported  in  the  main  favorably  on  the 
physical  condition  of  the  roads,  and  was  enthusiastic  over  their 
rapid  extension  throughout  the  state.  He  commended  the 
practice  of  building  railroads  in  advance  of  actual  business 
needs,  asserting  that  Minnesota  was  twenty-five  years  in  ad- 
vance of  what  she  would  have  been  if  the  "timidly  conserva- 
tive ideas  of  the  past"  had  prevailed. ^"^ 

If  the  legislature  had  carried  out  the  recommendations  of 
the  governor  and  railroad  commissioner,  much  of  its  time 
would  have  been  occupied  with  important  remedial  railroad 
legislation.    As  it  turned  out,  comparatively  little  was  done. 

An  act  was  passed  making  the  state  treasurer  collector  of 
railroad  taxes  and  providing  more  adequate  means  for  their 
collection.^"*^  This  act  did  not  go  as  far  as  desired  by  the  rail- 
road commissioner.  Any  railroad  company  organized  under 
the  laws  of  Iowa  was  authorized  to  extend  its  lines  into  ]\Iin- 
nesota,  and,  as  to  these  extensions,  was  to  possess  all  the  pow- 
ers, franchises,  and  privileges,  and  be  subject  to  the  same  lia- 
bilities, as  railroad  companies  organized  under  the  general  laws 
of  the  state. 

During  this  session  a  large  number  of  counties,  toAvns,  cities 
and  villages  w^ere  authorized  by  special  law  to  issue  bonds  to 

502.  Railroad   Commissioner'.s   Report,    1872,   pp.   5-22. 

503.  Ibid.,  p.  45.  See  Railroad  Commissioners'  Report  (Mass.),  1870, 
p.  ex.  The  Mass.  Commissioners  in  turn  copied  tlie  Mich,  law 
of   1869,  No.    109,   sec.   17,   cl.   9. 

504.  Railroad  Commissioner's  Report,   1872,  p.   46. 

505.  Ibid.,   p.   50. 

506.  General  Laws  of  Minn.,   1873,  ch.   114. 


120  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

aid  in  railroad  construction.^''^  An  act  was  passed  which  on 
the  face  of  it  would  seem  to  amount  to  partial  repudiation. 
The  city  of  Hastings  was  authorized  to  adjust  and  compromise 
its  outstanding  bonded  railway  indebtedness  at  a  rate  not  to 
exceed  fifty  cents  on  the  dollar,  new  bonds  to  replace  the  old.°°^ 
As  in  1872,  attempts  were  made  to  bargain  with  railroad 
companies  as  to  rates  through  special  legislation.  The  JNIil- 
waukee  and  St.  Paul  railroad  company  was  authorized  to  build 
a  bridge  across  the  ]\Iississippi  river  from  La  Crosse  on  con- 
dition that  it  would  carry  freight  and  passengers  on  equal  and 
reasonable  terms  f°°  and  on  this  same  condition  the  legislature 
extended  the  time  for  tlie  completion  of  certain  branch  lines 
of  the  St.  Paul  and  Pacific  railroad  company."' °  Many  gran- 
gers throughout  the  state  must  have  thought  this  i)rovision 
rather  superfluous. 

CHAPTER  Xn. 

THE  GRANGER  MOVEMENT  IN  1873. 

In  the  winter  of  1873  the  agitation  against  railroad  abuses 
was  resumed,  and  before  long  it  surpassed  in  intensity  the 
railroad  war  of  1870.  In  this  renewed  contest  the  grangers  of 
the  Order  of  Patrons  of  Husbandry  figured  prominently.  The 
farmers  had  learned  to  recognize  the  need  of  efficient  organiza- 
tion, and  as  the  purposes  of  the  grange  were  frequently  inter- 
preted to  meet  the  particular  needs  of  different  localities  and 
the  grange  everywhere  was  proclaimed  the  farmer's  best  means 
of  self-protection  against  all  oppression,  granges  began  to 
spring  up  on  all  sides.  Soon  manj^  unauthorized  organizers 
were  in  the  field,  making  the  best  of  the  movement  for  their 
personal  interests,  political  or  financial,  and  the  "Worthy  Mas- 
ter of  the  National  Grange  found  it  necessary  to  give  notice 
to  the  effect  that  no  dispensations  would  be  issued  in  Minne- 
sota on  the  application  of  any  person  except  deputies  ap- 
pointed by  the  Master  of  the  State  Grange.^' ^ 

507.  Special  Laws  of  Minn.,   1873,  chs.   152,   153,  and   156-166. 

508.  Ibid.,   ch.   151. 

509.  Ibid.,   cli.   106. 
530.  Ibid.,  ch.  107. 

511.     Farmers'  Union,  March  29,  1873,  p.  102,  c.  3;  notice  dated  Wash- 
ington,  D.  C,  March    18,    1873. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  121 

The  constitution  of  the  Order  for))ade  the  discussion  of 
political  questions  in  the  meetings  of  its  granges.  But  how 
could  a  constitutional  provision  prevent  the  discussion  of  rail- 
roads, monopolies,  middlemen,  and  the  tariff,  when  the  mem- 
bers of  the  grange  had  in  many  cases  united  for  the  express 
purpose  of  discussing  these  questions  and  planning  concerted 
action?  And  even  if  such  discussion  had  no  recognized  place 
in  the  grange  meeting  proper,  there  was  nothing  to  prevent  an 
informal  discussion  before  or  after  the  regular  program.  At 
this  time  these  questions  were  uppermost  in  the  minds  of  the 
people  everywhere. 

The  Minnesota  State  Grange  held  a  large  and  enthusiastic 
meeting  at  Lake  City  in  February.''^^  In  his  address  to  the 
State  Grange  the  Lecturer,  Mr.  D.  C.  Cummins,  proclaimed  as 
the  highest  ambition  of  the  Order  the  elevation  of  the  "family 
of  husbandmen  from  their  present  ignoble  position  to  that 
exalted  station  in  society  and  government  which  the  contem- 
plation and  imitation  of  nature's  works,  associated  with  in- 
telligence, is  calculated  to  do."''^"  It  is  difficult  to  see  how 
the  Order  could  accomplish  such  purposes  without  taking  part 
in  the  political  activities  of  the  day. 

There  seems  to  have  been  no  ban  placed  on  the  discussion 
of  the  railroad  problem  at  this  meeting.  The  Grange  even 
went  so  far  as  to  pass  the  following  resolution  : 

Resolved,  That  the  Secretary  of  the  State  Grange  request  our 
representatives  in  the  legislature  of  the  present  session  to  use  their 
influence  to  pass  a  bill  in  effect  to  appropriate  a  sum  of  monej^  suffi- 
cient to  employ  the  necessary  legal  council  to  test  the  validity  of  the 
present  law  on  our  statutes,  defining  the  charges  of  railroads  for 
freight  and  passenger  tariffs  over  their  respective  roads. "'i^ 

By  this  resolution  the  Grange  officially  showed  its  interest 
in  existing  reform  laws.  It  was  not  inclined,  however,  to  pro- 
pose definite  plans  for  further  reform. 

During  the  months  of  ^larch,  April,  May  and  June,  Ignatius 
Donnelly  made  a  series  of  addresses  before  the  granges  in 
Dakota,  Rice,  Goodhue,  Fillmore,  Mower,  Olmsted,  Winona 
and  Washington  counties.     These  addresses  were  on  live  ques- 


512.  Farmers'  Union,  March  1,  1873,  p.  67, 

513.  Ibid.,  May  3,   1873,   p.   140,   c.   4. 

514.  Ibitl..  March  15,   1873,  p.   83,  c.  5. 


122  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

tions  of  the  day,  such  as  "The  necessity  for  co-operation  among 
farmers;  Patent  laws  against  them;  Railroad  legislation  against 
them;  The  robberies  of  high  tariff  against  them;  The  evil  of 
paper  currency  against  them;  Their  remedies:  Clieap  trans- 
portation, ship  canals,  specie  payment,  and  low  tariff."  Ex- 
tracts from  his  speeches  were  published  in  pamphlet  form  and 
widely  circulated. ''^^  ]\Ir.  Donnelly  was  very  popular  as  a 
speaker,  and  by  his  brilliant  wit  and  his  spontaneous  eloquence 
he  could  hold  the  attention  and  win  the  applause  of  an  audi- 
ence on  any  subject,  whether  they  were  convinced  by  his  argu- 
ments or  not. 

Mr.  Donnelly  gave  the  Patrons  credit  for  having  revolu- 
tionized the  interpretation  of  the  laws  concerning  railroads  in 
bringing  them  under  the  control  of  the  state  legislature.  To 
him  the  Order  of  Patrons  of  Husbandry  meant  reform,  revolu- 
tion; it  w^as  the  fulcrum  Archimedes  washed,  from  w^hich  to 
move  the  world.  He  believed  it  to  be  "the  foundation  of  an 
universal  party,  the  party  of  the  people — the  party  of  the  farm- 
ers of  the  West,  the  planters  of  the  South,  and  the  poor  men 
of  the  whole  nation  *  *  *  *  it  -will  name  the  next  Presi- 
dent of  the  United  States!"'^"  It  is  very  prol)a])le  that  ]Mr. 
Donnelly  was  far  more  interested  in  the  foundation  of  such  a 
new' political  party  than  he  was  in  the  Order  itself.  He  was 
mainly  interested  in  the  Order  as  a  means  to  this  end. 

In  the  "P.  of  H. "  column  of  the  Farmers'  Union,  ^lay  10, 
1873,  appeared  some  fiery  "declarations  of  principles  and 
rights."  A  series  of  resolutions  had  been  adopted  at  Fari- 
bault which  were  endorsed  as  the  "true  ringing  declaration 
of  a  determined  class  of  men  to  change  the  order  of  railroad 
government  and  extortion."  These  resolutions  demanded  im- 
mediate legislation,  state  and  national,  to  protect  labor  against 
the  encroachment  of  capital,  to  prohibit  the  consolidation  of 
parallel  railroad  lines,  to  fix  the  maximum  of  railroad  charges, 
and  to  prevent  unjust  and  oppressive  discrimination  between 
local  and  through  freight.  They  maintained  that  the  inherent 
poAver  of  the  people  over  the  railroads  had  never  been  for- 

515.  I.  Donnelly,  Facts  for  the  Granges  (21  pages).  The  subjects 
of  his  speeches  cited  above  are  those  given  on  the  title  page 
of  this  pamphlet. 

516.  Ibifl.,   p.   10. 


I 


RAILROAD  LEGISLATION   IN  MINNESOTA.  123 

felted,  and  protested  against  the  siil)terfuges  of  the  legisla- 
ture in  avoiding  the  enactment  of  necessary  laws.  The  farm- 
ing community  was  described  as  being  in  an  embarrassed  and 
prostrated  condition,  and  a  general  bankruptcy  of  the  farmers 
of  the  state  was  declared  inevitable  if  the  law-making  powers 
did  not  come  to  their  aid  in  this  great  emergency.''' ' 

A  lively  discussion  arose  among  the  grangers  of  the  state 
as  to  Avhat  discussions  were  political  and  therefore  barred 
from  the  granges.  One  Patron  in  a  letter  to  the  Farmers' 
Union,  the  official  organ  of  the  State  Grange,  calls  the  outcry 
against  the  grangers'  dabbling  in  politics  senseless,  and  con- 
tends that  it  is  the  "imperative  dut,y  of  the  friends  of  morality 
and  good  government  to  combine  their  influence  in  the  main- 
tenance of  pure  political  action."  He  says  further:  "The 
Order  of  P.  of  H.  has  undertaken  one  of  the  greatest  moral 
reforms  that  ever  l)lessed  an  oppressed  people,  and  they  are 
fully  competent  to  complete  the  task  so  well  begun.  Party 
ties  should  no  longer  be  heeded,  unless  parties  present  men 
for  the  suflfrage  who  are  known  to  be  paramountly  favorable 
to  the  agricultural  and  other  industrial  interests  of  the  coun- 
try." -'^^ 

Another  Patron  says:  "Let  us  throw  politics  away  and 
elect  good,  honest,  intelligent  farmers  for  every  office  in  the 
State  except  our  legislature.  Some  might  think  Ave  were  a 
little  piggish  if  we  wanted  that  body  composed  wholly  of 
farmers.  *  *  *  Patrons,  this  is  a  point  worth  looking 
after.  Let  us  think  of  it  at  election  time."''''^  A  little  later 
this  Patron  writes :  ' '  Let  us  inform  our  next  legislators  that 
they  shall  have  our  votes  with  the  understanding  that  they 
will  work  for  the  interests  of  the  farmer  and  pass  a  law  fixing 
reasonable  rates  of  transportation  and  compelling  railroad 
companies  to  carry  our  produce  to  market  in  reasonable  time 
and  be  responsible  for  the  safe  deliverj'  at  any  desired  mar- 
ket ;  and  they  should  be  informed  that  if  they  break  the  con- 
tract and  vote  in  favor  of  the  railroad  monoplies,  they  should 
be  subject  to  the  decision  of  Judge  Lynch  and  close  confine- 


517.  Farmers'  Union,   May   10,   1873,  p.   148,   c.   1. 

518.  Ibid.,  May  3,  1873,  p.  140,  c.  1;  Letter  of  Wm.  Close. 

511).     Ibid.,   March  22,   1873,  p.  93,  c.  4;  Letter  of  Geo.  K.  Hopkins. 


124  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

ment  under  a  white  oak  limb  for  a  term  of  not  less  than  five 
minutes  nor  more  than  fifteen.  ""'-'* 

"Bro."  J.  S.  Denman  wrote:  "And  now,  brothers,  as  elec- 
tion draws  near  and  our  town  caucuses  and  county  conventions 
are  at  hand,  we  must  be  up  and  doing.  *  *  *  ]f  yyQ  ^re 
going  to  bring  a])Out  a  reform  in  i)olities,  every  man  in  every 
town  wants  to  attend  the  caucus  and  see  that  the  ri»ilit  kind 
of  men  go  to  the  county  convention."'-^ 

'^^rhe  (juestion  occupying  the  minds  of  a  great  numlx'r  of 
grangers  was  wliat  action  tliey  sliould  take  in  the  coming  cam- 
paign. They  had  common  interests,  and  it  seemed  al)surd  for 
one  to  go  to  the  polls  and  vote  one  ticket  wliile  his  neighl)or 
voted  another."'--  The  local  grangers  were  hampered  in  giving 
formal  expression  to  their  political  views  by  the  constitutional 
provision  already  referred  to.  But  in  many  counties  there  was 
a  County  Council  composed  of  representatives  from  tlie  dif- 
ferent subordinate  granges  in  the  county.  These  Councils  were 
extraneous  to  the  constitutional  plan  of  the  Order,  and  were 
therefore  not  considered  bound  l)y  tlie  constitution  as  were  the 
national,  state,  and  subordinate  granges.  Mr.  Donnelly  and 
others  for  this  reason  urged  tlie  formation  of  County  Councils 
in  all  counties  and  encouraged  political  discussion  and  political 
action  by  them."" 

The  Steele  County  Council  of  Patrons  of  Husbandry  met 
at  Owatonna  in  the  first  part  of  June,  1873,  and  after  some  dis- 
cussion drew  up  a  very  vigorous  set  of  resolutions.  They 
agreed  that  the  railroad  companies  must  be  radically  reformed 
and  controlled  by  the  strong  hand  of  law.  The  aid  of  every 
Patron  and  of  every  fair-minded  man  Avas  invoked  to  secure 
legislation  fixing  maximum  charges,  preventing  watered  stock, 
and  prohibiting  the  consolidation  of  competing  lines.  Rail- 
roads were  to  be  comi)elled  to  assume  all  the  duties  of  common 
carriers,  and  })articularly  to  receive  and  transmit  freight  with- 
out discrimination  or  favoritism.  They  resolved  finally,  "That 
we  recognize  the  fact  that  to  seeur(^  and  enforce  these  enact- 


520.  Ibid.,  May  10,   1873,   p.   148,  c.  2. 

521.  Ibid.,   July  5,   1873,   p.   211,  c.   2. 

522.  Ibid.,  .Tune  21,  1873;  Letter  of  Wm.  N.  riyinat.  p.  lUi 

523.  Donnelly,  Facts  for  the  Granges,  p.   19. 


RAILROAD  LEGISLATION   IN  MINNESOTA. 


125 


mciits  our  votes  must.  onfoi'i*e  our  wishes  and  our  action  must 
be  strongly  politieal,  though  not  partisan  in  its  hearings."^-* 

Other  County  Councils  met  and  adoi)ted  similar  resolu- 
tions/'-"' 

Another  plan  i'requently  adopted  ])y  the  Grangers  to  secure 
concerted  political  action  was  to  call  meetings  of  the  members 
of  the  different  subordinate  grangers  in  a  county,  who  were  to 
act  "not  as  grangers  but  as  citizens.""'-*'  Such  a  meeting  w^as 
held  in  Brownsdale,  IMower  county,  July  26,  1878.  The  grangers 
here  issued  a  call  for  a  county  convention  to  organize  a  new 
political  party  and  to  issue  a  call  for  a  state  convention. '^-^ 
Mr.  J.  J.  Hunt,  IMaster  of  the  Brownsdale  Grange,  presided, 
and  ^Ir.  Donnelly  delivered  the  principal  address.-^-^  The  con- 
vention drew  up  a  series  of  resolutions.  They  expressed  a  lack 
of  coniidence  in  both  existing  political  parties,  and  condemned 
the  present  management  of  railroads  whereby  monopolies  and 
rings  secured  special  advantages.  They  considered  it  the  duty 
of  the  attorney  general  to  enforce  the  laAV  of  1871,  and  de- 
manded an  amendment  of  this  law  so  as  to  make  its  ])rovisions 
more  fair  and  equitable  to  the  people.  They  called  for  a  county 
convention  of  farmers  and  laborers  to  meet  at  Brownsdale, 
September  25,  to  nominate  candidates  for  county  offices. 
P^'inally  an  invitation  was  extended  to  all  who  agreed  with 
them  in  these  declarations  of  principles  to  meet  in  mass  con- 
vention at  Owatonna,  September  2."^ 

The  people  throughout  the  state  were  thoroughly  aroused, 
and  many  w^ere  beginning  to  believe  with  jMr.  Donnelly  that  the 
time  had  come  for  the  organization  of  a  new  political  party  to 
carry  out  the  proposed  reform.  As  in  1870,  the  Republican 
party  aligned  itself  against  "railroads  and  monopolies,"  and 
appealed  for  the  support  of  all  Avho  favored  refoi-m. '•''*'  In  its 
state  convention  held  in  St.  Paul,  July  16,  they  adopted  in  their 

524.  Farmers'  Union,  Jan.  28,  1873,  p.   205,  c.  2. 

525.  For  instance,  Le  Sueur  County  Council,  Oct.  7,  Farmers'  Union, 
Oct.  18,  1873,  p.  333,  c.  1;  Olmsted  County  Council,  Oct.  17,  The 
Minn.  Record    (Rochester),  Oct.   25,  1873. 

526.  Donnelly,  Facts  for  the  Granges,  p.   19. 

527.  Ibid.,  p.  19;  St.  Paul  Daily  Pioneer,  July  27,   1873,  p.   1,  c.  2. 

528.  Farmers'  Union,  Au.g-.  9,  1873,  p.  252,  c.  1-4.  The  address  is 
given  in  Donnelly,  Facts  for  the  Granges. 

529.  Ibid.,  Aug.  9,   1873,  p.   252,  c.  4. 

530.  See  Duluth  Minnesotian,   Nov.   1,   1873. 


126 


MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 


l)latronu  resolutions  to  tlu'  cttV'ct  that  no  riglits  should  he 
vested  in  railroad  cor[)orati()ns  Ijcyond  the  control  of  future 
legislation,  and  that  the  legislature  should  attach  such  condi- 
tions to  all  new  grants,  and  to  aniendinents  and  extensions  of 
old  charters,  as  Avould  i)lace  the  rights  of  legislative  control 
over  such  corporations  l)e\'ond  question.  They  pledged  them- 
selves in  favor  of  the  enactment  of  such  laws  as  would  limit  to 
just  and  reasonable  rates  all  tolls,  tariffs,  and  charges  of  rail- 
road and  transportation  companies.'''^ 

There  was  a  hard  fight  in  the  convention  between  the  old 
"Ramsey  dj^nasty"  and  the  "young  Republicans"  over  the 
candidate  for  governor.  Mr.  Washburn,  the  Ramsey  aspirant, 
had  a  strong  political  backing  and  was  considered  by  many  a 
worthy  favarite ;  but,  after  a  series  of  ballots,  the  choice  fell 
on  C.  K.  Davis,  a  St.  Paul  attorney,  whose  lecture  on  "^Modern 
Feudalism"  had  made  him  popular  w^ith  those  who  favored  a 
more  stringent  corporation  control.  ]\Ir.  Davis  Avas  nominated 
on  a  very  narrow  margin,  and  was  not  very  enthusiastically 
supported  during  the  following  campaign  by  some  of  the  old 
party  leaders ;  but  as  he  had  been  a  pioneer  in  the  anti-monop- 
oly movement,  his  nomination  was  quite  generally  looked  upon 
by  the  people  as  an  overthrow  of  the  "politicians."  ■'^•'■- 

It  is  not  to  be  understood,  however,  that  ]\Ir.  AVashburn 
was  opposed  to  reform.  He  had  been  actively  interested  in  the 
enactment  of  the  law  of  1871,  and  in  the  campaign  of  1878  he 
spoke  strongly  in  favor  of  railroad  regulation,  state  and  na- 
tional.^^^  Throughout  the  state  most  of  the  Republican  can- 
didates pledged  themselves  to  support  the  farmers'  movement. 

The  Democrats  co-operated  with  the  new  Anti-monopoly 
party  during  this  campaign.  They  postponed  holding  their 
state  convention  till  after  the  Owatonna  Anti-monopoly  con- 
vention, having  made  up  their  minds  to  support  its  candidates, 
I)rovided  they  and  the  platform  adopted  were  acceptable. 
They  contended  that  the  new  movement  was  fully  in  accord 

531.  St.  Paul  Daily  Pre.'is,  .July  17,  1873,  p.  4,  c.  2;  Federal  Union, 
July  25,   1873,   p.   2,  c.  4. 

532.  St.  Paul  Daily  Despatch.  Oct.  11,  1873,  p.  2.  c.  1 ;  St.  Paul  Daily 
Press,  July  17,  1873,  p.  1,  c.  1;  July  20,  1873,  p.  2,  c.  6,  quotes 
nine  papers  endorsing  Mr.  Davis. 

533.  Farmers'  Union,  Nov.  1,  1873.  p.  349;  speech  before  Dodge 
County  Agricultural  Society,   Sei't.  26,   1873. 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


127 


with  Democratic  principles  and  deserved  Democratic  sup- 
port.^^* 

Some  subordinate  granges  had  met  and  appointed  delegates 
to  the  convention  to  be  held  in  Owatonna,  September  2,  and 
other  granges  were  considering  what  action  to  take,  when 
State  Master  Geo.  I.  Parsons  issued  a  notice  giving  it  as  his 
opinion  that  not  only  was  such  action  unwise  but  also  in  direct 
violation  of  the  fundamental  law  of  the  Order,  and  that  it 
subjected  the  granges  so  doing  to  the  danger  of  a  revocation 
of  their  charters.  He  expressed  profound  regret  and  mortifica- 
tion at  having  witnessed  a  departure  from  the  cherished  prin- 
ciples of  the  Order.^^' 

This  move  on  the  part  of  the  State  INIaster  was  perfectly 
consistent  with  the  original  aims  of  the  Order  and  Avas  heartily 
endorsed  by  many  of  the  Patrons,'"'^  but  it  proved  an  effective 
check  on  organized  political  action  by  the  granges,  much  to  the 
chagrin  of  the  Anti-monopolists.  It  was  frequently  interpreted 
as  being  in  itself  partisan,  because  it  influenced  so  many  to  act 
through  the  regular  Kepublican  party  organization  who  other- 
wise would  have  joined  the  new  movement.  ]Mr.  Donnelly  Avas 
unsparing  in  his  criticism  of  State  Master  Parsons,  who,  he 
said,  would  vote  for  the  devil  himself  if  he  were  regularly 
nominated  by  the  Republican  party.''^ 

But  the  anti-railroad  agitation  was  by  no  means  checked. 
It  continued  as  lively  as  before  among  tlic  grangers,  and  gran- 
gers had  by  this  time  come  to  mean  all  those  Avho  sympathized 
with  the  farmers'  movement,  whether  they  belonged  to  the 
Order  of  Patrons  of  Husbandry  or  not.  As  a  matter  of  fact, 
in  many  localities  most  of  the  farmers  did  belong  to  granges. 
The  regular  agricultural  societies  of  the  time  took  no  part  in 
the  movement.  The  hitherto  numerous  farmers'  clubs  and  so- 
cieties, other  than  granges,  had  nearly  all  suspended  opera- 
tion, or  had  been  transformed  bodily  into  granges.  The  grange 
was  practically  the  only  vital  farmers'  organization  during  this 


534.  St.  Paul  Daily  Pioneer,   Sept.  2,  1873,  p.  2,  c.   1;  St.  Paul  Daily 
Press,  Aug-.  19,  1873,  p.  1,  c.  1. 

535.  Farmers'  Union,  Aug.  16,  1873,  p.  261,  c.  2. 

536.  For  example,  North  Star  Grange   (St.   Paul)   by  unanimous  res- 
olution;  Farmers'  Union,  Aug.   23,    1873,   p.   269,   c.   1. 

537.  See  Anti-Monopolist,  July  16,  1874. 


128 


MINNESOTA    HISTOUICAL   SOCIETY    COLLECTIONS. 


period.  Tliougli  the  granges  eould  take  no  acti\e  i>art  in 
politics  officially,  yet  they  continued  as  before  to  afford  a  com- 
mon meeting  place  Avliere  farmers  could  discuss  more  or  less 
formally  the  questions  in  which  they  were  so  vitally  interested 
and  come  to  an  informal  understanding  on  issues  and  candi- 
dates. 

The  Owatonna  convention  was  not  so  well  attended  as  many 
had  hoped  for,  although  twenty-three  counties  were  repre- 
sented.'""'® A  long  series  of  resolutions  was  drawn  up  and 
adopted,  which  was  to  serve  as  the  platform  of  the  new  Anti- 
monopoly  party.  They  pledged  themselves  to  recognize  no 
political  party  or  candidate  as  worthy  of  support  which  did 
not  declare  that  the  government  cannot  alienate  its  sovereignt}'-, 
either  in  whole  or  in  part,  to  any  person,  association,  or  cor- 
poration, for  any  purpose  whatever.  They  would  support  no 
candidate  who  objected  to  the  exercise  by  the  legislature  of  its 
l)ower  to  reverse  or  annul  at  any  time  the  chartered  privilege, 
or  "so-called  vested  right,"  wlien  exercised  by  the  corporation 
to  the  detriment  of  public  welfare.  They  also  condemned  pro- 
tective tariff,  high  official  and  congressional  salaries,  and  "back 
pay."  They  condemned  the  wood  and  coal  rings  which  mo- 
nopolized the  fuel  supply  in  tlie  cities.  They  favored  free 
water  communication  with  the  ocean.  They  held  that  the  state 
ought  to  bear  the  cost  of  suits  against  railroad  companies,  and 
commended  the  state  supreme  court  on  its  decision  in  the  case 
of  Blake  vs.  The  Winona  and  St.  Peter  railroad  company. 
Farmers  and  laborers  were  advised  to  choose  and  elect  their 
own  candidates  in  the  coming  elections,  independent  of  the 
action  of  all  other  political  organizations.''"^ 

The  convention  nominated  candidates  for  all  state  offices, 
and  urged  the  minor  political  subdivisions  of  the  state  likewise 
to  present  complete  tickets  at  the  coming  election. 

During  the  campaign  on  the  stump  and  through  the  press, 
the  Republicans  showed  that  the  law  of  1871  had  been  enacted 
by  a  Republican  legislature  and  had  been  upheld  by  Repub- 
lican judges.     They  claimed  that  they  continued  to  support 

538.  St.  Paul  Daily  Pioneer,  Sept.  3,  1873,  p.  1,  c.  1. 

539.  Ibid.,  Sept.  3,  1873,  p.  1,  c.  2;  Farmers'  Union,  Sept.  6,  1873,  p. 
285,  c.  1-3.  The  resolutions  are  also  g-iven  in  full  in  Martin, 
History  of  tlie  Grunge  Movement,   p.  510. 


RAILROAD  LEGISLATION  IN  MINNESOTA  129 

the  reform  movement,  and  that  they  were  pledged  to  further 
reform  legislation.  On  the  other  hand,  the  Anti-monopolists 
insisted  that  the  law  of  1871  had  never  been  enforced  by  the 
Republican  officials,  the  railroads  having  disregarded  it  from 
the  start.  They  contended  that  the  pledges  of  the  Republican 
platform  referred  only  to  future  roads  and  further  grants  to 
existing  roads,  and  that  they  seemed  to  imply  an  acknowledg- 
ment of  vested  rights  in  former  grants."'^" 

The  railroads  were  by  no  means  disinterested  observers 
during  this  campaign.  They  realized  that  much  was  at  stake 
and  made  free  use  of  passes  and  other  valuable  considerations 
which  they  were  in  a  position  to  offer. ''*^ 

During  the  years  1872  and  1873  a  fierce  railroad  war  was 
waged,  in  which  Minnesota  was  vitally  interested.  The  people 
of  the  state  had  long  been  looking  for  the  completion  of  a  rail- 
road connecting  Minneapolis  and  St.  Paul  with  Duluth,  to 
bring  into  competition  with  the  all-railroad  route  to  Chicago 
a  cheaper  route  eastward  via  the  great  lakes,  and  thus  to  re- 
duce rates  on  products  sold  and  on  goods  shipped  in.  And 
low  rates  came  almost  immediately  on  the  opening  of  the  new 
road.  The  distance  from  the  TavIu  Cities  to  Duluth  is  one  hun- 
dred and  fifty-six  miles,  while  the  distance  to  Chicago  is  four 
hundred  miles.  The  promoters  of  the  Lake  Superior  and  ]\Iis- 
sissippi  railroad  company  figured  on  doing  most  of  the  carry- 
ing trade,  during  the  season  of  lake  navigation,  for  the  entire 
section  of  the  country  comprising  all  of  ^Minnesota  and  the  Da- 
kotas  and  the  parts  of  Wisconsin  and  Iowa  nearer  Duluth  than 
Chicago.  But  President  IMitchell  of  the  Milwaukee  and  St. 
Paul  railroad  issued  a  decree  "making  every  station  on  its  road 
as  near  Chicago  on  Lake  Michigan  as  Duluth  on  Lake  Supe- 
rior," and  though  the  actual  difference  in  distance  in  many 
cases  was  fully  two  hundred  and  fifty  miles  this  difference  was 
to  be  ignored  in  fixing  freight  charges. ■'^*- 

Rates  were  fixed  in  such  a  way  that  cities  and  towns  within 
fifty  miles  of  ^Minneapolis  and  St.  Paul  were  practically  com- 
pelled to  sell  their  produce  and  buy  their  goods  in  Chicago. 


540.  Federal  Union,  July  25,   IST.I,   \>.   2.  c.   i. 

541.  Stickney,   The   Railway   Problem,   |).   100. 

542.  Ibid.,   p.   98. 


130  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

While  this  rate  war  was  on,  the  farmers  in  many  districts  en- 
joyed extremely  low  transportation  rates,  but  the  railroads 
had  to  recoup  themselves  the  best  they  could  during  seasons 
of  closed  navigation  and  in  districts  where  competition  was  not 
strong.  It  was  claimed  that  districts  in  Wisconsin  had  to  pay 
a  considerable  part  of  the  expense  of  the  transportation  of 
favored  sections  in  Minnesota  during  this  rate  war,"'*"^  and  this 
may  account  to  some  extent  for  the  strength  of  the  granger 
movement  in  "Wisconsin  at  this  time. 

There  was  little  or  no  anti-railroad  agitation  in  Minnesota 
in  1872.  It  may  be  that  the  people  were  waiting  to  see  what 
the  results  of  the  legislation  enacted  in  1871  would  be,  and  of 
the  contest  between  the  railroads.  But  in  1873,  as  we  have 
seen,  the  anti-railroad  sentiment  in  this  state  was  not  to  be 
ignored — a  sentiment  shared,  however,  by  many  other  states.^** 

In  September,  1873,  the  Milwaukee  and  St.  Paul  railroad 
joined  with  the  West  Wisconsin  and  the  Winona  and  St.  Peter 
railroads  in  raising  the  rate  on  wheat  to  Chicago  three  cents  a 
bushel. ^*^  The  Northern  Pacific,  which  had  control  of  the  Lake 
Superior  and  Mississippi  railroad  and  connections,"^^®  did  not 
make  any  advance  in  rates  and  was  highly  commended  by 
many  for  its  action.-*^  The  concerted  increase  of  railroad  rates 
called  forth  a  storm  of  indignation  and  gave  new  impetus  to 
the  granger  movement. ^^^ 

In  the  midst  of  this  intense  agitation  came  the  panic  of 
1873.     This  financial   crisis  was  the  inevitable   conclusion  of 


543.  Ibid.,   p.   112. 

544.  Railway  Gazette,  Dec.  27,  1873,  'The  Railroad  Year."  Under 
this  caption  the  paper  says  the  year  has  been  distinguished  by 
the  growth  of  distrust  and  jealousy  of  railroads,  and  gives  in- 
stances from  a  number  of  states  not  usually  classed  as  granger 
states,    namely,   Wisconsin,    Illinois,   Iowa,    and    Minnesota. 

545.  Duluth  Weekly  Tribune,   Sept.   18,   1873. 

546.  To  make  connections  with  the  Twin  Cities  from  Duluth,  the 
Northern  Pacific  leased  three  connecting  lines:  the  Lake  Supe- 
rior and  Mississippi,  May  1,  1872;  the  Minneapolis  and  Duluth, 
Sept.  1,  1871;  and  the  Stillwater  and  St.  Paul,  Nov.  1,  1870.  See 
Railroad  Commissioner's  Reports  for  1871,  p.  40,  app.,  and  1873, 
p.  163  app. 

547.  Duluth  Minnesotian,  Sept.  20,  1873;  Nov.  1,  187.1,  from  the  St. 
Paul  Press,  Oct.  29. 

548.  Duluth  Weekly  Tribune,  Sept.  18,  1873,  "The  Three  Cent  Ex- 
tortion" (from  St.  Paul  Press);  Duluth  Minnesotian,  Sept.  20, 
1873,  "Increase  of  Railroad  Charges;"  Farmers'  Union,  Sept.  27, 
1873,  p.  308,  c.  2,  "A  Protest." 


RAILROAD  LEGISLATION  IN  MINNESOTA.  131 

an  era  of  over-speculation  and  misdirected  production,  and  it 
was  national  and  international  in  its  scope.  In  this  country 
money  had  been  scarce  and  the  rate  of  interest  high  at  dif- 
ferent times  during  the  two  preceding  years.  The  crisis  was 
precipitated  September  18,  by  the  failure  of  Jay  Cooke,  who 
had  l)een  unable  to  float  a  large  issue  of  Northern  Pacific 
bonds.  The  news  of  this  failure  shattered  all  confidence,  and  a 
general  panic  ensued  on  Wall  street,  thence  spreading  over 
the  whole  country. 

Minnesota  had  also  had  her  share  of  speculation.  Railroads 
had  been  pushed  as  never  before,  and  almost  altogether  on 
borrowed  capital,  in  spite  of  the  fact  that  different  railroad 
companies  had  been  showing  deficits  at  the  end  of  each  year.'^" 
As  in  the  other  Granger  states,  railroads  were  built  far  beyond 
present  business  demands.  Enormous  sums  of  capital  were 
tied  up  for  the  time  unproductively,  and  in  such  amounts  per 
railroad  mile  as  to  offer  little  hope  for  remunerative  returns 
for  some  time  to  come.  Business  enterprises  of  all  kinds  were 
undertaken  with  frontier  optimism,  and  to  a  considerable  ex- 
tent on  borrowed  capital,  for  money  at  the  time  was  plentiful. 

But  when  the  crash  came  ready  cash  disappeared  and  busi- 
ness operations  were  suspended.  Even  the  farmer  found  it 
nearly  impossible  to  dispose  of  his  products.^^"  Fortunately 
^Minnesota  had  comparatively  few  business  failures,^^^-  and,  as 
the  crops  that  summer  had  been  reasonably  good  in  spite  of 
local  devastation  by  the  grasshoppers,^^-  the  people  of  the  state 
looked  upon  the  depression  as  merely  temporary. 

The  railroads  suffered  severely,  it  is  true,  but  their  "ab- 
sentee owners,"  who  were  popularly  ranked  with  tyrants  and 
oppressors,  did  not  get  much  sympathy.  The  farmers  through- 
out the  middle  west  had  been  in  arms  against  "railroads  and 
monopolies"  for  several  years,  and  now  it  was  freely  charged 


549.  Railroad  Commissioner's  Report,  1871,  appendix;  1872,  app.,  p. 
207;  1873,  app.,  p.  231;  Railroad  Gazette,  Oct.  11,  1873,  p.  414; 
Poor's  Manual  of  the  Railroads  of  the  United  States,  for  1872-3, 
pp.  xlii  and  xliii;  for  1873-4,   pp.  xl  and  xli. 

550.  St.  Paul  Daily  Dispatch,  Sept.  19,  1873,  p.  4,  c.  2,  "The  Sense- 
less Panic." 

551.  St.  Paul  Daily  Pioneer,  Sept.  20,  1873,  p.  4,  c.  2;  St.  Paul  Daily 
Dispatch,  Sept.  19,  1873,   p.  4,  c.  2;  Oct.  10,   1873,  p.  2,  c.  1. 

552.  St.  Paul  Daily  Dispatch,   Sept.   20.   1873,   p.   2,  c.   1. 


132  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

tliat  they  had  tlierel)y  shaken  i)u])lie  eonfidenee  in  railroad  in- 
vestments and  brought  ruin  to  tlie  country.  The  grangers  in 
turn  pointed  to  the  recent  disclosures  of  iiuincnse  frauds  in 
connection  with  several  of  the  larger  railroads  and  particu- 
larly to  the  Credit  ]\Iol)ilier,'''"'  and  saw  in  this  a  sufficient  rea- 
son for  a  shaken  faith  in  railroads  as  operated  at  the  time. 
Some  might  admit  that  their  warfare  had  precipitated  an  un- 
avoidable catastrophe,  but  tliey  denied  being  in  any  way  its 
cause.  They  believed  for  a  while  that  after  all  the  panic  was 
only  a  flurry  in  the  fictitious  values  in  which  the  speculators 
had  been  interested,  and  that  good  honest  industry,  the  eco- 
nomic "bone  and  sinew"  of  the  country,  would  not  be  mate- 
rially affected.^^* 

The  grangers  remained  firm  in  their  (.'onviction  that  their 
cause  was  just  and  continued  their  fight  for  railroad  regula- 
tion. The  campaign  seemed  in  the  main  unaffected  by  the 
panic. 

The  Olmsted  County  Council  of  Patrons  of  Husbandry  met 
October  17.  They  passed  a  resolution  declaring  that  it  Avas 
the  duty  of  the  state  and  general  government  to  establish  rea- 
sonable maximum  rates  of  freight  upon  railroads.  The  Coun- 
cil submitted  twenty-five  questions  to  the  subordinate  granges 
of  the  county  for  discussion.  None  of  these  referred  to  the 
railroad  or  monopoly  problems  of  the  time.  This  seems  to  in- 
dicate that  they  intended  to  live  up  to  the  letter  of  the  law  and 
not  formally  discuss  jiolitical  (piestions  in  the  granges.^'"'' 

The  Democrats  and  Liberal  Republicans  met  in  state  con- 
vention at  St.  Paul  on  September  24  and  formally  endorsed  the 

553.  See  House  of  Representatives,  42d  Congress,  3d  session,  Report 
No.  77,  Credit  Mobilier  Investigation,  Feb.  18,  1873  (pp.  xix, 
523);  Report  No.  78,  Affairs  of  thie  Union  Pacific  Railroad  Com- 
pany, Feb.  20,  1873  (pp.  xxvi,  770);  Report  No.  78.  part  2;  Re- 
ports No.  81,  82,  and  95;  Senate  Report  No.  519,  42d  Congress, 
3d  session,  Feb.  27,  1873  (pp.  xxxvi,  162);  .J.  E.  Stevenson, 
Speeches   in    the  House   of  Representatives,   Feb.    26   and    March 

1,  1873.  and  Exhibit  of  Credit  Mobilier  Legislation  and  Oper- 
ations (Wash.,  1873);  .1.  B.  Crawford,  The  Credit  Mobilier  of 
America,  its  Origin  and  History;  St.  Paul  Daily  Dispatch,  Oct. 
3,  1873,  p.  2,  c.  1;  Farmers'  Union,  Oct.  4,  1S73,  p.  308,  c.  3;  The 
Duluth  Minnesotian,  Sept.  27,  1873;  Cultivator  and  Country 
Gentleman,   Oct.    23,    1873.   XXXVIII.    683,    "Cause   of  the   Panic." 

554.  St.   Paul  Daily   Pioneer,  Oct.   23,   1873,   p.   2,  c.   1;   Nov.   1,   1873,   ]>. 

2,  c.  2;  Nov.  9,  1873. 

555.  The  Minnesota  Record    (Rochester),  Oct.   25,   1873. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  133 

platform  and  candidates  presented  by  the  Anti-Monopolists  at 
Owatonna."'"'  It  Avas  believed  that  concerted  action  on  the 
part  of  all  the  oi>iiosition  forces  would  inevitably  lead  to  a 
Republican  defeat  at  the  polls  in  November. 

The  unusual  interest  taken  in  this  off-year  election  is  shown 
by  the  comparatively  heavy  vote  cast  throughout  the  state  on 
election  day.  The  voting  was  frequently  for  men  rather  than 
l>arties.  The  number  of  votes  received  by  different  men  on 
the  same  ticket  varied  consideral)ly.  Of  the  state  offices,  the 
most  lively  contest  was  for  tlie  office  of  state  treasurer.  Dur- 
ing the  legislative  session  of  the  previous  winter  the  treasurer 
had  been  accused  of  placing  state  money  at  the  disposal  of  a 
"gang  of  St.  Paul  politicians"  without  securing  to  the  state 
any  compensation  for  its  use."'"''  An  investigation  followed 
which  disclosed  a  number  of  irregularities.  The  state  treas- 
urer was  receiving  a  comparatively  small  salary,  but  through  a 
secret,  well-estal)lished  practice  of  depositing  the  state  money 
judiciously  the  party  in  power  was  enabled  to  strengthen  its 
organization  and  the  treasurer  could  add  materially  to  his 
rather  meager  income.  When  these  facts  became  known  a  gen- 
eral hue  and  cry  for  reform  was  raised,  and  during  the  cam- 
paign of  1873  great  political  capital  was  made  of  this  example 
of  "Republican  corruption  and  mismanagement." 

The  Republican  convention  had  made  a  tactical  mistake  in 
not  nominating  for  state  treasurer  iMr.  E.  W.  Dyke,  whom 
Governor  Austin  had  appointed  to  fill  the  resigned  treasurer's 
place,  and  who  had  filled  this  position  creditably.  The  oppo- 
sition element  saw  in  this  another  flagrant  example  of  "ring" 
rul(»  Avithin  the  Republican  ranks,  and  the  Anti-monopolists, 
seizing  their  opportunity,  nominated  Mr.  Dyke  as  their  candi- 
date for  this  office. 

In  the  November  election  the  Republicans  Avere  victorious. 
They  elected  the  entire  state  ticket,  Avith  the  exception  of 
treasurer.  To  this  position  Mr.  Dyke  Avas  elected  bj'^  a  good 
majority. 

Of  the  one  hundred  and  six  representatives,  the  Republi- 

556.  St.  Paul  Daily  Pioneer,  Sept.   25,  p.  2,  c.  1;  Duluth  Minnesotian, 
Sept.   27,    1873,   "The   Demo-Liberal   Convention." 

557.  St.  Paul  Daily  Dispatch,  Oct.  20,  1873,  p.   2,  c.   1;  Oct.   27,  p.   2,  c. 
1;  Nov.  1,  p.  2,  c.   1. 


134  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

cans  elected  seventy-eight.  Of  twenty  senators  to  be  chosen 
at  this  election,  the  Republicans  elected  a  sufficient  number  to 
give  them  thirty  out  of  a  total  of  forty-one  members  of  the 
Senate. "^^^  Tliis  was  an  increase  in  the  Republican  member- 
ship in  both  the  House  and  Senate  over  the  preceding  year.^^° 
The  defeat  of  the  opposition  was  variously  explained.  The  St. 
Paul  Pioneer  claimed  that  it  was  due  to  lack  of  efficient  cam- 
paign organization,  asserting  that  the  Democratic  state  central 
committee  had  never  met,  and  that  the  Anti-monopoly  com- 
mittee had  likewise  done  absolutely  nothing  to  keep  able  men 
in  the  field.-'«° 

It  is  to  be  noted,  however,  that  the  defeat  of  the  Anti-mo- 
nopoly party  and  its  allies  did  not  mean  the  overthrow  of  the 
farmers'  movement.  By  nominating  C.  K.  Davis,  a  known 
sympathizer  with  the  grangers,  for  governor,  the  Republican 
party  practically  adopted  this  movement  as  its  own,  and  seri- 
ously interfered  with  the  plans  of  Mr.  Donnelly  and  others  to 
identify  the  anti-monopoly  movement  with  a  new  political 
party.'^"^  A  letter  which  Mr.  Davis  published  shortly  after  his 
nomination  was  instrumental  in  reassuring  many  whose  faith 
in  the  party  was  wavering.^^^  Had  Mr.  Dyke  been  nominated 
state  treasurer  by  the  Republicans,  the  opposition  party  would 
have  made  a  sorry  showing.  All  Republicans  w^ere  by  no 
means  in  accord  with  the  granger  ideas  of  their  gubernatorial 
candidate.  This  was  evident  at  the  state  convention,  and  later 
throughout  the  campaign.  But  under  his  leadership  the  gran- 
ger element  remained  in  the  ascendency  and  the  party  gained 
a  decisive  victory  at  the  polls. 

The  interest  in  the  railroad  question  did  not  subside  after 
election.  Although  the  railroads  were  about  to  go  into  the 
hands  of  receivers,  the  people  remained  determined  that  they 
should  be  compelled  to  submit  to  law. 

During  tlie  annual  meeting  of  the  State  Grange  held  in 
Faribault  in  December,  the  State  Master  delivered  an  address 


558.  World  Almanac,  1873,  p.  42. 

559.  Cf.  VP^orld  Almanac,    1872,   p.   69. 

560.  St.  Paul  Daily  Pioneer,  Nov.   12,   1873,   p.   2,   c.   1. 

561.  St.  Paul  Daily  Press,   July  17,   1873,   p.   1,  c.   1;  Aug.   19,   1873,   p. 
1,  c.  1. 

562.  Smalley,   The   History   of  the   Republican  Party,   p.    196. 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


135 


on  transportation.  Althoiigli  he  liad  opposed  political  action 
on  the  part  of  subordinate  granges,  liis  speech  was  thoroughly 
in  sympathy  with  the  farmers  in  their  complaints  of  exorbitant 
and  unjust  tariffs  and  in  their  demands  for  reduced  rates.  He 
held  that  since  the  railroads  of  the  state  had  been  largely  built 
by  the  people  through  land  grants  and  bonuses,  it  was  unjust 
for  them  to  earn  dividends  on  other  than  their  actual  invest- 
ments and  thus  make  the  people  pay  dividends  on  their  own 
donations.  He  therefore  recommended  that  the  State  Grange 
send  a  select  committee  to  the  next  legislature  to  assist  in  the 
framing  of  a  law  looking  to  the  correction  of  the  evils  of  the 
existing  system  of  transportation.  He  also  recommended  that 
assessments  be  levied  on  the  granges  for  carrying  on  any  suit 
in  which  the  validity  of  such  a  law  might  be  contested. ^*^" 

It  is  difficult  to  understand  how  Mr.  Parsons  could  con- 
strue such  action  on  the  part  of  the  State  Grange  to  be  any- 
thing but  political  in  its  nature.  Later  in  the  session  a  motion 
to  provide  for  such  a  "lobbying"  committee  as  recommended 
by  the  State  Master  was  voted  down  because  of  the  expense 
involved,  and  especially  because  many  deemed  the  plan  dis- 
creditable to  the  Order.'^^* 

CHAPTER  Xni. 

THE  GRANGER  LEGISLATION  OF  1874. 

During  the  campaign  of  1873,  as  we  have  seen,  the  railroad 
question  was  the  most  vital  issue  in  most  parts  of  the  state. 
The  widespread  dissatisfaction  with  the  railroad  management 
of  the  time  found  expression  through  caucuses  and  conven- 
tions, in  party  platforms,  and  in  campaign  speeches,  and  was 
voiced  in  no  uncertain  tone  on  election  day.  In  the  legislature 
which  met  in  January,  1874,  a  large  majority,  regardless  of 
party  affiliations,  had  been  pledged  to  railroad  regulation.  Of 
the  one  hundred  and  six  members  of  the  House  sixty-four  were 
farmers,  and  there  was  also  a  good  sprinkling  of  farmers  in 
the  Senate. °®'    Most  of  these  were  Patrons  and  came  as  "ex- 


563.  Farmers'  Union,  Dec.  27.   1873,  p.  412,  c.   4-7. 

564.  Ibid.,  March  7,  1894,  p.  68,  c.  1. 

565.  Minn.    Legislative    Manual,    1874,    pp.    148-153;    Farmers'    Union, 
July   18,   1874,   p.   220,  c.   1. 


136  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

press  representatives  of  the  Grange  movement."''""'  There 
seems  to  have  been  a  general  feeling  of  confidence  in  these 
legislators.  Most  of  them  were  believed  to  be  men  who  had 
the  "moral  courage  to  attack  iniquity  in  its  very  citadel."'''®^ 

At  the  opening  of  the  session  tlie  more  radical  element  tried 
to  unite  all  those  who  were  pledged  to  reform  and  tluis  cap- 
ture the  organization  of  the  House.  All  "anti-monopolists," 
without  regard  to  former  party  ties,  were  invited  to  meet  in 
a  caucus  to  nominate  candidates  for  tlie  elective  House 
offices.''**^  Their  candidate  for  speaker,  a  meml)er  of  the 
grange,  lost  out  hy  only  three  votes.  ^lany  felt  tliis  defeat 
keenly  and  took  it  as  an  indication  that  tlie  cause  was  lost  for 
the  time  ])eing.^""  The  Pioneer,  in  commenting  on  the  organ- 
ization of  the  House,  expressed  itself  as  follows:"''^'  "It  was  to 
their  credit  that  a  few  members  of  the  House  elected  on  the 
Republican  ticket  came  here  with  an  honest  purpose  to  aid 
reform.  It  was  to  their  discredit  that  the  ring-master,  with 
whip  and  clul),  drove  them  into  the  monopoly  trap,  by  Avhich 
the  organization  of  the  legislature  will  be  handed  over  in  all 
its  parts  to  those  corrupt  and  venal  few  who  have  so  long 
preyed  on  the  vitals  of  the  state.  *  *  *  The  party  of 
monopoly  and  corruption  is  still  in  the  ascendant  in  ]\Iinne- 
sota." 

Mr.  Donnelly,  who  had  been  elected  senator,  immediately 
expressed  lack  of  faith  in  the  legislature  and  began  prepara- 
tions for  a  new  campaign.  He  Avas  appointed  to  serve  on  the 
Senate  railroad  committee,  but  refused  to  meet  with  the  other 
members  because  he  did  not  believe  tliey  were  in  sympathy 
with  the  people.^" 

Governor  Austin,  in  his  final  message  to  the  legislature, 
reviewed  the  railroad  situation  at  length.  It  is  evident,  from 
his  recommendations  and  remarks,  that  liis  position  in  regard 
to  railroad  regulation  remained  unchanged.  The  state  supreme 
court  had  upheld  the  constitutionality  of  tlie  law  of  1871  in 

566.  Farmers'  Union,  .July   18,    1874,   p.   220,  c.   1;   "Mr.   Donnelly   once 
more." 

567.  St.   Paul   Weekly   Pioneer,    Feb.    20,    1874. 

568.  St.   Paul  Daily   Dispatch,   Jan.   5,    1874. 

569.  Ibid.,  Jan.  7,   1874;   "Defeated  by  Treachery." 

570.  St.   Paul  Daily  Pioneer,  Jan.   4,   1874. 

571.  Farmers'   Union,   Feb.   21,   1874,   p.   52,   c.    2. 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


137 


the  Blake  eases,  but  the  railroad  company  had  appealed  to  the 
federal  supreme  court.  The  governor  deemed  it  advisa])le  to 
make  it  the  duty  of  the  attorney  general,  or  of  the  railroad 
commissioner,  hereafter  to  prosecute  suits  of  this  nature  at  tlie 
public  expense."-  He  believed  that  the  law  of  1871,  if  main- 
tained, would  be  found  too  arbitratry  and  inelastic,  especially 
because  all  railroads  could  not  justly  be  required  to  carry 
freight  and  passengers  at  the  same  rates."''"  He  recommended 
that  complaints  against  railroad  companies  should  be  heard 
and  determined  by  a  board  to  consist  of  the  railroad  commis- 
sioner and  a  number  of  efficient  men  appointed  to  serve  witii 
him."*  He  approved  of  adopting  in  the  main  the  PVench  plan 
of  strict  government  inspection  and  supervision  of  all  roads, 
the  regulation  of  their  charges,  and  allowing  no  tariff  ad- 
vances without  showing  good  cause  and  obtaining  leave. "^ 
He  believed  as  before,  however,  that  cheap  transportation  could 
only  be  secured  by  improving  and  extending  the  waterways. 

He  urged  a  considerate  attention  to  the  claims  of  foreign 
creditors  at  this  time  of  financial  depression.  The  railroads  of 
the  state  had  been  built  largely  by  foreign  capital,  the  St.  Paul 
and  Pacific  alone  having  twenty-six  million  dollars  in  bonds  held 
in  Holland.  Though  the  money  had  in  many  cases  not  been 
honestly  applied,  he  considered  the  claims  just  and  worthy  of 
consideration."" 

The  Winona  and  St.  Peter  railroad  company  stood  in  need 
of  legislative  confirmation  of  its  claims  to  certain  lands.  The 
governor  suggested  that  in  this,  as  in  other  cases  where  rem- 
edial legislation  was  sought,  it  should  be  given  with  such  con- 
ditions as  would  expressly  secure  the  company's  submission 
to  tlie  general  laws  and  regulations  of  the  state.  As  we  have 
seen,  the  legislature  had  frequently  embodied  special  provi- 
sions as  to  reasonable  rates  in  such  enactments,  ])ut  these  had 
not  gone  to  the  extent  of  requiring  a  full  surrender  of  their 
special  privileges.  Since  all  the  special  charter  railroads  had 
not  come  before  the  legislature  at  the  same  time  for  relief,  it 

16. 


572. 

Minn.   Exec.  Docs., 

1873, 

vol.  : 

1,   Governor's  Message, 

11. 

573. 

Ibid.,   p.   18. 

574. 

Ibid.,  p.   19. 

575. 

Ibid.,    p.   20. 

576. 

Ibid.,   pp.   n-12. 

138  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

had  been  repeatedly  argued  with  effect  that  such  a  provision 
in  an  individual  instance  would  be  an  "unfriendly  and  unjust 
discrimination."  ^'^ 

Governor  Davis,  in  his  inaugural  address,  showed  himself 
equally  interested  in  securing  reform.  He  was  not  certain  that 
the  law  of  1871  would  be  binding  on  other  railroad  companies, 
even  though  it  were  held  applicable  to  the  Winona  and  St. 
Peter."®  He  considered  the  claims  of  the  special  charter  rail- 
roads, if  upheld,  a  standing  menace  to  the  state.  He  proposed 
two  remedies.  First,  the  state's  right  of  eminent  domain  might 
be  applied  to  the  railroads  in  such  a  way  that  the  state  on 
payment  of  just  compensation  could  acquire  the  right  to  pre- 
scribe rates.  The  measure  of  such  compensation  could  not  be 
what  abuse  and  extortion  on  the  part  of  the  companies  would 
yield  if  permitted  to  continue  forever,  but  would  have  a  more 
reasonable  standard."^  Second,  he  recommended  a  constitu- 
tional amendment  prescribing  that  when  any  statute  is  enacted 
in  favor  of  or  for  the  benefit  of  a  company  at  its  instance,  the 
company  should  by  the  mere  force  of  the  beneficial  enactment 
be  subject  to  such  duties  and  control  by  the  state  as  the  amend- 
ment might  propose.  Since  railroad  companies  were  frequently 
in  need  of  such  favorable  and  enabling  legislation,  he  believed 
such  a  policy  would  soon  annihilate  the  claims  of  the  special 
charter  companies  to  self-regulation.^®"^  The  new  constitution 
of  Pennsylvania,  adopted  in  1873,  contained  such  a  provi- 
sion.^®^ As  we  have  seen  the  retiring  governor  recommended 
a  similar  plan,  but  not  so  fully  developed. 

The  railroad  commissioner,  in  his  annual  report,  complained 
that  his  powers  were  too  limited  to  remedy  the  railroad  abuses. 
He  called  attention  to  the  fact  that  he  could  not  commence 
suits  against  railroad  companies  and  had  no  power  to  prevent 
extortions,  his  duties  being  mainly  limited  by  the  law  to  the 
collection  of  facts  and  statistics  for  the  information  of  the  leg- 
islature.°®-    He  made  no  recommendations  in  this  regard,  but 


577.  Ibid.,  pp.  13-14. 

578.  Ibid.,  Inaugural  Address,  p.  12. 

579.  Ibid.,  p.   13. 

580.  Ibid.,  pp.  13-14. 

581.  Const,  of  Penn.   (operative  Jan.   1,  1874),  Art.   17,  sec.   10. 

582.  Railroad  Commissioner's  Report,    1873,   pp.  v  and   vi. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  139 

left  it  to  the  legislature  to  determine  whether  an  extension  of 
powers  would  be  advisa])le. 

The  coninaissioner  had  continued  his  investigation  of  rail- 
road lands  which  were  legally  subject  to  taxation,  and  re- 
ported new  cases  of  evasion."*'  IMost  of  the  companies  i)aid 
their  gross  income  tax  promptly,  but  where  the  companies  neg- 
lected or  refused  to  make  returns  of  their  gross  earnings  there 
was  no  proper  metliod  provided  by  law  for  its  collection.  He 
recommended  legislation  to  remedy  this  defect."'^* 

Various  remedies  against  unreasonable  rates  are  discussed. 
In  view  of  the  fact  that  most  of  the  railroads  of  the  state  were 
bound  by  their  charters  to  transport  freight  at  reasonable 
rates,  and  since  proofs  as  to  reasonableness  or  unreasonable- 
ness were  mostly  in  the  exclusive  possession  of  the  railroad 
companies,  he  contended  that  the  burden  of  proof  ought  to  be 
sliifted  from  the  shipper  to  the  company,  and  tliat  the  legisla- 
ture should  establish  certain  rates  to  be  prima  facie  reasonable. 
The  railroads  would  be  permitted  to  bring  forward  proofs  to 
rebut  this  assumption  of  reasonableness.^*^ 

The  railroads  continued  to  insist  on  their  "vested  rights" 
and  immunity  from  the  general  laws  and  regulations.  Dis- 
criminations continued  to  be  the  rule,  rather  than  the  excep- 
tion. The  commissioner  believed  that  as  long  as  the  railroads 
insisted  on  these  wrongs,  so  long  would  the  revolt  against  them 
assume  greater  and  greater  magnitude.^^"  He  again  reviewed 
the  federal,  state,  and  municipal  aid  to  the  railroads  of  the 
state,  and  contended  that  the  people  had  not  shown  themselves 
unfriendly  to  the  railroads  as  often  charged.  They  had  been 
liberally  dealt  with  in  franchises,  land  grants,  bonuses,  and 
right-of-way  donations;  and  all  that  the  people  ask  for  these 
prodigal  gifts,  said  he,  is  security  from  extortion  and  freedom 
from  unjust  discrimination.''*^ 

Tlie  great  question  before  the  legislature  of  1874  was  the 
solution  of  the  perplexing  railroad  pro])lem.  All  agreed  that 
something  must  be  done,  but  there  was  a  great  variety  of  opin- 


583. 

Ibid., 

pp.  vi-xi. 

584. 

Ibid.. 

p.  xiv. 

585. 

Ibid., 

pp.  xlv-xlvi, 

586. 

Ibid., 

p.   Ixiii. 

587. 

Ibid., 

p.  Ixiii. 

140  MIXMOSOTA    HISTORICAL    SOCIETY    COLLECTIONS. 

ions  in  tlie  legislature  and  throughout  tlie  state,  as  to  what 
should  be  done.  ]\Iany  held  that  nothing  short  of  a  constitu- 
tional amendment  defining  clearly  the  power  of  the  state  over 
railroads  would  suffice.  St.  Julien  Cox  proposed  in  the  Senate 
to  add  an  article  of  ten  sections  to  the  constitution."'"^  These 
sections  embodied  the  main  provisions  of  the  recent  Illinois 
and  Pennsylvania  constitutions  relating  to  railroads.  '•''"  This 
proposed  amendment  was  received  with  favor  by  many  anti- 
monopolists  in  both  liouses,  but  its  consideration  was  indefi- 
nitely postponed  by  a  vote  of  eighteen  to  thirteen.'""  One  pro- 
vision of  this  proposed  amenduient  forl)idding  the  consolida- 
tion of  parallel  lines  was  later  in  the  session  enacted  as  a  laM'.'-" 
It  is  verbatim  from  the  Pennsylvania  constitution,  except  that 
it  applies  to  railroads  only  and  not  to  railroads  and  canals.''''- 

At  its  annual  meeting  in  December  tlie  State  Grange  had 
decided  against  maintaining  a  "lo]>bying  committee  at  the 
capital  during  the  legislative  session.''-' '  But  when  the  legis- 
lature met  the  executive  committee  of  the  State  Grange,  at  the 
request  of  a  number  of  legislators,  ajipointed  a  committee  to 
confer  with  them  as  to  wiiat  legislation  was  desired  ])y  the 
Patrons  and  farmers  of  the  state."'"'  Its  members  were  given 
seats  in  the  Senate,  with  the  understanding  that  they  were  to 
look  after  matters  of  interest  to  the  farmers.''"'  In  certain 
(|uarters  much  was  expected  of  this  committee,''""  but  little  was 
accomplished  beyond  stirring  up  considerable  ill-feeling  in 
many  of  the  granges  because  it  had  been  appointed  against 
the  express  Avishes  of  the  State  Grange.''"^ 

At  first  the  farmer  element  in  the  legislature  had  a  feeling 
of  distrust  and  jealousy  tow^ard  the  other  members,  which 
threatened  to  interfere  seriously  Avith  the  legislative  Avork,  but 

588.  St.  Paul  Evening  Journal,  Jan.  9,  1874;  An  address  to  the  Anti- 
monopoly  Party   in   Minn.,    18T4,   i>.   9. 

589.  Const,    of   Ills.,   Art.    XI,    sees.    9-15;   Const,    of    Penn..    Art.   XVII, 
sees.    1-12. 

590.  An   address   to   the  Anti-monopoly    Party   in    Minn.,    1874,   )).    9. 

591.  General  Laws  of  Minn.,    1874,   ch.   29. 

592.  See  Const,  of  Penn.,  Art.  XVII,   sec.   4. 

593.  Farmers'   Union,   Mch.    7,    1874. 

594.  Ibid.,   March    28,    1874. 

595.  Ibid.,   Feb.  21,    1874,   p.   52,   c.   2. 

596.  Ibid.,   p.   52,  c.   2. 

597.  Ibid.,   March   7.   1874,   p.    68,   c.   1;   March   21,    1874.   p.   84:   Apr.    11, 
1874,  p.   108. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  141 

this  soon  passed  away. '"'-  The  reformers  were  divided  into  two 
main  faetions.  The  more  radical  wished  to  foUow  up  the  state 
supreme  court  decision  in  the  Blake  case,  and  advocated  laws 
fixing  the  rates  of  charjjes  arbitrarily  on  the  plan  of  the  law  of 
1871.  Others  favored  the  enactment  of  a  new  law  framed  on 
the  theory  that  the  railroad  corporations  should  each  be  al- 
lowed to  charge  a  reasonable  toll,  after  taking  into  account  the 
benefits  they  had  received  from  the  people."'"'' 

A  bill  establishing  maxiuuim  reasonable  rates  and  provid- 
ing stringent  penalties  was  introduced  in  the  Senate,  but  met 
the  same  fate  as  the  proposed  constitutional  amendment, — it 
was  indefinitely  postponed.  All  the  six  who  voted  against 
postponement  were  anti-monopolists.  One  had  been  elected  as 
an  indei)endent,  and  five  as  Republicans ;  of  these  five,  three 
were  grangers.""" 

State  senator  Donnelly  introduced  a  l)ill  l)ased  on  the  law 
of  1871.  Its  main  feature  was  a  provision  that  whenever  any 
railroad  company  refused  to  obey  the  law,  it  should  at  once  be 
put  into  the  hands  of  receivers.  Railroad  companies  were  in 
this  way  to  be  compelled  to  obey  the  law  while  litigation  was 
going  on.  They  were  not  to  have  the  privilege  of  refusing 
obedience  until  the  law  had  been  sustained  in  tlie  highest 
courts.*"'^ 

In  the  House  a  bill  was  introduced  by  Mr.  Oandall,  and 
was  favorably  reported  by  the  committee  of  the  whole.""-  This 
bill  was  in  the  main  like  the  Illinois  railroad  law,  but  it  in- 
cluded a  maximum  rate  al)Ove  which  the  railroad  commission- 
ers were  not  to  go  in  fixing  rates.  The  railroads  were  to  be 
divided  into  classes  according  to  the  amount  of  business  done, 
and  rates  were  to  be  prescribed  for  each  separately."""  This 
l)ill  passed  the  House  l\y  a  vote  of  sixty-five  to  twenty-nine,^°* 
but  came  only  as  far  as  the  second   reading  in  the  Senate.*"^^ 

598.  Ibid.,   Feb.   14,   1874,   p.   44,   c.   2. 

599.  Owatonna  Journal,   Apr.   9,   1874;   Speech   by   Hon.   Amos  Coggs- 
well. 

600.  An   Address    to   the   Anti-Monopoly    Party    in    Minn.,    1874,    p.    10. 

601.  Ibid.,  p.  10. 

602.  House  Journal,   1874,   p.    185;   H.   F.  No.   36. 

603.  Farmers'   Union,    Feb.    14,    1874.    p.   44;   see  also   Feb.    21   and    28. 

604.  House  Journal,   1874,   p.   217;   H.   F.  No.   36. 

605.  Senate  Journal,   1874;  see  Index,  p.  622,   Bills  of  the  House,   No. 
36. 


142  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

The  House  indefinitely  postponed  a  l)ill  to  i)rovide  for  the 
appointment  of  a  board  of  railroad  eoniinissioners,'"'*'  but  passed 
a  l)ill  creating  the  office  of  assistant  railroad  commissioner,®"^ 
A  number  of  ])ills  were  also  under  consideration  in  the  Sen- 
ate, when  its  Eailroad  Committee  introduced  a  substitute  bill 
for  all  pending  railroad  bills,  including  those  passed  by  the 
House. "^"^  This  l)ill  passed  the  Senate, ""^  but  did  not  prove 
stringent  enough  to  suit  the  House.  First  the  committee  on 
railroads,  to  which  it  was  referred,  reported  back  a  substi- 
tute,''^^  but  on  recommitment  they  reported  it  back  with  amend- 
ments and  recommended  its  passage.®^^  Two  successive  con- 
ference committees  were  appointed  before  the  bill  as  amended 
by  the  House  with  some  further  amendments  was  acceptable 
to  both  houses.*'^-  The  House  for  a  long  time  insisted  that  a 
maximum  rate  should  ])e  fixed  above  which  the  commissioners 
were  not  to  be  allowed  to  go,  but  was  at  last  forced  to  yield."''' 
The  bill  passed  the  House  by  a  vote  of  eighty-three  to  three.®'* 
In  the  Senate  only  two  votes  were  cast  against  the  bill,  those 
of  Donnelly  and  Drake,®'"'  one  the  leader  of  the  new  Anti- 
monopoly  party,  and  the  other  the  president  of  the  Southern 
Minnesota  railroad  and  Republican  leader  in  the  Senate.®'® 
Donnelly  objected  to  the  bill  because  it  gave  a  commission  of 
three  appointed  by  one  man,  the  governor,  the  power  to  fix 
rates  without  any  limits  whatever.  "The  people  elected  a  leg- 
islature to  regulate  railroads,"  said  he,  "and  after  sixty  days 
session  the  Republican  majority  discard  all  the  bills  proposed 
by  the  Anti-monopolists,  and  coolly  tell  the  people,  'You  picked 
the  wrong  men ;  we  know  nothing  about  railroads,  we  are  too 
ignorant  and  incapable  to  fix  a  schedule  of  charges.'  "  ®'^ 

606.  House  Journal,    1874,   p.    185;   H.   F.  No.   4. 

607.  Ibid.,   p.   235;  H.   F.  No.   86,   here  by   misprint  No.   36. 

608.  Senate  Journal,  1874,  p.  291;  S.  F.  No.  271.  See  Farmers'  Union, 
Feb.   28,   1874. 

609.  Ibid.,   p.  344.      The  vote  stood   29   to   7. 

610.  House  Journal,    1874,   p.    424. 

611.  Ibid.,   p.    463. 

612.  Ibid.,  pp.  498,  550,  and  562.  See  St.  Paul  Daily  Press,  March 
6,  1874,  p.  2,  c.  2;  St.  Paul  Daily  Dispatch,  March  6,  1874, 
p.   4,  c.   2. 

613.  St.   Paul  Daily  Press,  March   6,   1874,   j).   2,  c.   1. 

614.  House  Journal,   1874,  p.   563. 

615.  Senate  Journal,    1874,    p.    482. 

616.  Rochester  Post,  March   14,   1874. 

617.  An   Address   to   the   Anti-Monoi)oly   Party,   1874,   p.    12. 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


143 


This  railroad  law  of  1874  ^^^  created  a  board  of  three  rail- 
road commissioners  to  be  appointed  by  the  governor,  with  the 
consent  of  the  Senate,  for  a  term  of  two  years.  No  stockhold- 
er, trustee,  assignee,  lessee,  agent  or  employee  of  any  railroad 
corporation  was  to  be  eligible  to  this  office.  The  commission- 
ers were  severally  required  to  give  bonds  with  security  in  the 
sum  of  twenty  thousand  dollars  for  the  faithful  performance 
of  their  duties.  The  governor  was  given  authority  to  remove 
any  member  when  convinced  that  he  was  guilty  of  malfeasance 
or  non-feasance  of  official  duties.*'^^  The  salary  of  each  was 
fixed  at  three  thousand  dollars  per  annum  and  necessary  ex- 
penses.®-" 

They  were  to  be  in  session  at  all  times  for  the  performance 
of  their  duties,  and  were  required  to  keep  a  record  of  all  their 
proceedings  and  to  make  an  annual  report  to  the  governor, 
containing  such  information  as  would  disclose  the  actual  work- 
ings of  the  system  of  railroad  transportation  in  its  bearings 
upon  the  business  of  the  state  and  such  suggestions  as  they 
might  deem  appropriate.  The  governor  might  also  direct  them 
to  make  special  investigations  and  reports.®-^  They  were  given 
plenary  powers  of  investigation,  and  were  authorized  to  em- 
ploy experts  when  they  deemed  it  necessary.®^^ 

The  commissioners  were  directed  to  make  a  schedule  of 
maximum  legal  rates  of  charges  for  each  of  the  railroads  doing 
business  within  the  state. ®-^  Special  charter  railroads  were  not 
excepted.  The  law  fixed  no  maximum  rates  whatever  except 
for  terminal  charges.®-* 

The  published  schedules  were  to  be  deemed  prima  facie 
evidence  of  what  were  reasonable  rates  at  any  given  time.  The 
commissioners  had  authority  to  revise  the  schedules  as  often 
as  circumstances  might  require,  and  the  changes  were  binding 
after  publication  for  three  successive  weeks  in  two  weekly  St. 
Paul  newspapers.®-^     The  act  forbade  unjust  discrimination  of 


618. 

General  Laws  of  Minn., 

1874, 

ch. 

26, 

619. 

Ibid.,   sec.   1. 

620. 

Ibid.,   sec.   2. 

621. 

Ibid.,   sec.   3. 

622. 

Ibid.,   sec.   4. 

623. 

Ibid.,   sec.   5. 

624. 

Ibid.,  sec.  9. 

625. 

Ibid.,  sees.  6  and  7. 

144  MINNESOTA    HISTORICAL    SOCIETY    COLLECTIONS. 

all  kinds  and  virtually  enforced  fiat  i)ro  rata  transportation 
charges.  Different  companies  luigiit  charge  different  rates,  but 
each  company  was  obliged  to  charge  the  same  rates  at  dift'er- 
ent  points  for  transportation  in  the  same  direction  on  all  parts 
of  its  main  lines,  its  l)ranches,  and  on  other  roads  which  it  used 
or  operated.  All  variations  in  charges  for  services  under  sim- 
ilar circumstances,  directly  or  by  means  of  rebates  or  draw- 
backs, were  made  i)rima  facie  evidence  of  unjust  discrimina- 
tion, and  competition  with  anotlier  railroad  at  any  point  could 
not  be  i)roffered  as  a  sufficient  excuse  or  justification.  Com- 
mutation, excursion,  and  thousand  mile  tickets  might  be  issued 
as  before,  Otlierwise  there  were  only  two  exceptions  to  the 
general  rule :  Agricultural  i)roducts  might  be  shipped  from 
outside  the  state  to  points  within  tlie  state  at  uniform  rates, 
less  than  the  established  local  rates;  and  lumber  might  be 
transported  to  points  at  least  twenty-five  miles  outside  the 
state  at  special  rates."-" 

Railroad  companies  were  reijuired  to  furnish  cars  for  the 
transportation  of  freight  when  requested  to  do  so,  and  to  re- 
ceive all  freiglit  offered  and  transport  it  with  reasonable  dis- 
patch,"-' At  all  points  within  the  state  where  two  or  more 
railroads  intersected,  it  was  made  the  duty  of  the  railroads  to 
provide  for  the  convenient  transfer  of  cars  and  freight  from 
one  line  to  another  without  unreasonable  or  unnecessary  de- 
lay.®-* 

All  who  owned  coal,  wood,  or  lumber  yards,  elevators,  ware- 
houses, mills  or  factories,  at  or  near  any  railroad,  were  given 
right  of  access  to  the  railroad  tracks  for  necessary  connec- 
tions at  a  reasonable  annual  rental,  which  was  to  be  determined 
by  the  railroad  commissioners  where  the  parties  could  not 
agree,"-® 

If  any  railroad  company  charged  unreasonable  rates  or 
unjustly  discriminated  against  any  person  or  corporation, 
town,  village  or  city,  the  aggrieved  party  had  a  right  to  re- 
cover in  a  civil  action  trel^le  damages,  together  with  costs  and 


626.  Ibid.,  sec.    9. 

627.  Ibid.,  sec.   10. 

628.  Ibid.,  sees.  11   and   12. 

629.  Ibid.,  sec.   13. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  145 

a  reasonable  attorney's  fee."'"  Any  eonijuiny  guilty  of  violat- 
ing any  provision  of  this  act  was  liable  to  a  fine  of  one  thousand 
dollars  for  the  first  oiTense,  and  from  two  to  five  thousand  dol- 
lars for  the  seeond  and  subsecjuent  offenses.  In  all  eases  aris- 
ing under  the  act,  either  party  had  the  right  to  trial  by  jury."'^ 
AVhenever  final  judgment  was  rendered  against  a  railroad  for 
the  recovery  of  a  penalty  prescribed  by  this  act,  it  became  the 
duty  of  the  railroad  commission  to  institute  quo  warranto  pro- 
ceedings to  ])rocure  the  vacation  of  the  company's  charter  and 
the  extinguishment  of  its  franchises;  and  if  the  company  con- 
tinued to  violate  the  act  while  this  case  was  pending,  the  judge 
before  whom  such  proceedings  were  instituted  was  authorized 
to  appoint  receivers  for  the  company.*^''- 

Any  resident  of  the  state  feeling  himself  aggrieved  because 
of  the  violation  of  any  provision  of  this  act  had  the  privilege 
of  making  a  complaint  in  writing  and  under  oath  to  the  board 
of  railroad  commissioners.  If  the  commissioners  on  inquiry 
deemed  it  proper,  they  could  recpiire  the  attorney  general  or 
the  proper  county  attorney  to  bring  suit  against  the  com- 
pany.''^^  Employees  and  agents  of  railroad  companies  were 
made  personally  liable  for  willfully  aiding  in  the  violation  of 
the  law  in  the  same  manner  as  the  railroad  companies  them- 
selves.^^* 

The  act  was  not  to  be  construed  as  repealing  the  common 
law  remedies  against  railroad  abuses,  but  expressly  provided 
that  its  remedies  were  cuumlative.  Actions  brought  under  its 
provisions  were  given  precedence  over  all  other  business  in  the 
courts  of  the  state,  excepting  criminal  business  f^''  and  no  such 
action  commenced  on  behalf  of  the  state  might  be  dismissed 
unless  the  reason  for  dismissal  were  recorded.*^"*^ 

The  board  of  railroad  commissioners  was  to  possess  the 
powers  and  perform  the  duties  given  the  railroad  commis- 
sioner under  the  law  of  1871,  except  as  changed  in  this  act.®" 


630. 

Ibid., 

sec. 

15. 

631. 

Ibid., 

.sec. 

16. 

632. 

Ibid., 

sec. 

17. 

633. 

Ibid.. 

sec. 

19. 

634. 

Ibid.. 

sec. 

23 

635. 

Ibid., 

sec. 

18. 

636. 

Ibid., 

sec. 

22. 

637. 

Ibid., 

sec. 

24. 

10 

146  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

The  remainder  of  tliat  law  was  repealed,  as  was  also  the  max- 
imum rate  law  of  that  year,  but  the  repeal  was  not  to  affect 
suits  brought  under  it.®^^ 

The  provisions  of  this  law  were  drawn  freely  from  two  laws 
passed  by  the  legislature  of  Illinois,  namely,  the  act  creating 
a  board  of  railroad  and  Avareliouse  commissioners,  enacted  in 
1871,®^^  and  an  act  to  prevent  extortion  and  unjust  discrimi- 
nation, enacted  in  1873.^" 

"While  competition  alone  was  no  longer  relied  upon  as  an 
efficient  safeguard  against  railroad  extortion  and  abuses,  the 
sentiment  remained  strong  that  competition  must  be  main- 
tained as  far  as  possible.  The  legislature  therefore  passed  an 
act  to  prevent  the  consolidation  of  the  stock,  property,  or 
franchises  of  parallel  or  competing  companies  by  purchase  or 
lease,  nor  were  their  interests  to  be  merged  by  means  of  com- 
mon officers.  The  question  whether  railroads  were  parallel  or 
competing  was  to  be  decided  by  jury  as  in  other  civil  cases.®*^ 

An  act  was  passed  making  railroad  companies  liable  for 
fires  along  their  lines,  such  fires  being  made  prima  facie  evi- 
dence of  carelessness  or  neglect  on  the  part  of  the  company.®*- 

Another  act  relative  to  proceedings  in  expropriation  for 
railroad  purposes  was  made  applicable  to  all  railroads  whether 
incorporated  under  the  general  law  or  by  special  charter.®" 
This  last  feature  virtually  repealed  a  great  amount  of  special 
law,  for  such  provisions  were  found  in  all  special  charters. 

The  senate  appointed  a  committee  early  in  the  session  to 
investigate  "elevator  monopoly"  along  the  lines  of  the  St.  Paul 
and  Pacific.®**  On  February  12  this  committee  reported  that 
they  had  conclusively  established  the  fact  that  a  small  group 
of  men  had  enjoyed  a  complete  monopoly  of  handling,  storing, 
and  forwarding  grain  on  the  main  line  of  the  St.  Paul  and 
Pacific  railroad  ever  since  it  was  built.  Written  contracts  had 
been  found  which  gave  them  these  exclusive  privileges.  The 
committee  held  that  a  railroad  is  a  common  carrier  and  as  such 


638. 

Ibid.,   sec.   25. 

6319. 

Revised   Statutes   of   IHinois, 

1874,    p.    828. 

640. 

Ibid.,  p.  816. 

641. 

General  Laws  of  Minn.,   1874, 

ell.   29. 

642. 

Ibid.,  ch.  30. 

643. 

Ibid.,  ch.   28. 

644. 

Senate  Journal,  1874,  p.  86. 

RAILROAD  LEGISLATION  IN  MINNI'^SOTA.  147 

lias  no  right  to  establish  a  nioiiopoly  of  tlie  storage  or  eoiumis- 
sion  business,  but  should  be  compelled  to  furnish  facilities  to 
all  Avho  desired  to  build  warehouses  and  handle  grain.  As  a 
remedy  for  the  evils  complained  of  by  the  farmers  along  the 
line,  the  enactment  and  rigid  enforcement  of  a  suitable  ware- 
house law  was  recommended.  As  a  further  remedy,  an  action 
might  be  brought  against  the  railroad  company  to  vacate  its 
charter  for  the  long  continued  exercise  of  ultra  vires  powers 
to  the  detriment  of  the  people.^*^ 

The  legislature  acted  upon  the  recommendations  of  this 
special  committee."*^  A  law  was  enacted  declaring  all  ele- 
vators and  warehouses  situated  on  any  railroad  within  the 
state  to  be  personal  property  and  subject  to  taxation  as  such.*'*^ 
By  joint  resolution  the  attorney  general  was  instructed  to  im- 
mediately commence  judicial  proceedings  to  vacate  the  charter 
of  the  First  Division  of  the  St.  Paul  and  Pacific  railroad,  or  to 
take  other  action  as  might  be  proper  to  remedy  the  alleged 
abuses. ^*^ 

Complaints  with  reference  to  the  handling  of  grain  were 
not  confined  to  any  one  railroad.  They  were  quite  general. 
The  farmers  believed  that  they  were  exploited  both  as  to  grade 
and  weight.  When  they  shipped  their  own  grain  to  market 
the  loss  of  weight  en  route  was  frequently  such  as  to  discour- 
age similar  independent  shipments  in  the  future.  Various 
measures  were  proposed  to  afford  relief.  A  bill  to  revive  the 
common  law  responsibilitj^  of  common  carriers  passed  the  Sen- 
ate but  failed  in  the  House.""  Another  bill  to  remedy  the  evil 
of  '^ shortage  and  stealage"  in  the  transportation  of  grain  by 
refjuiring  certified  weight  at  the  shipping  point  also  failed.''"'" 
A  bill  was  passed,  however,  which  fixed  the  maximum  charge 
of  two  cents  per  bushel  for  receiving,  elevating,  handling  and 
delivering  grain,  and  provided  that  the  grain  inspector  must 
in  no  way  be  interested  in  the  purchase  and  shipping  of  grain. 


645.  Ibid.,    pp.    231-234;    Report    of    the    special    committee    on    ware- 
houses and   elevators   on   the  St.  Paul   and   Pacific. 

646.  See  St.  Paul  Daily  Dispatch,  Feb.   14,   1874,   p.   2,  c.   2,   "Elevator 
Monopoly." 

647.  General  Laws   of  Minn.,   1874,   ch.   32. 

648.  Ibid.,  p.   310;  Joint  Res.  No.   30. 

649.  An   Address  to   the   Anti-Monopoly   Party,    1874,   p.    10. 

650.  Ibid.,   p.   10. 


148  MINNESOTA  HISTORICAL,  SOCIETY  COLLECTIONS. 

If  a  railroad  company  refused  to  handle  grain  at  the  prescribed 
rate,  any  person  Avould,  on  demand,  have  the  privilege  of  build- 
ing and  maintaining  a  warc^house  or  elevator  at  the  station, 
without  i)ayment  of  any  comjx'nsation  to  the  railroad  com- 
pany. Violations  of  this  act  involved  tlie  penalty  of  a  fine  of 
from  one  hundred  to  five  hundred  dollars."'' 

Since  the  legislature  had  so  strongly  asserted  its  authority 
over  all  railroads,  one  would  liardly  exjx'et  it  to  make  special 
agreements  with  railroads  for  the  express  surrender  of  their 
rate-making  power.  This  course  of  action  had,  as  we  have 
seen,  been  recommcMided  hy  (iovernors  Austin  and  Davis  and 
by  the  railroad  commissioner,  and  it  was  considered  expedient 
because  the  federal  supreme  court  might  yet  decide  against  the 
rate-making  powers  of  the  legislature  in  the  case  of  special 
charter  corporations. 

The  time  limit  for  the  completion  of  l)raneh  lines  of  the 
Minneapolis  and  St.  Louis  railroad  company  was  extended  for 
a  period  of  five  years  on  condition  that  "passengers  and  freight 
shall  always  be  carried  on  said  lines  of  railroad  at  such  rea- 
sonable and  equitable  rates  as  may  be  from  time  to  time  fixed 
by  law.  "*'^-  This  was  also  one  of  the  conditions  upon  which 
time  extension  was  granted  to  the  St.  Paul  and  Pacific  rail- 
road company.*'"'' 

The  Green  Bay  and  Minnesota  railroad  company,  a  AVis- 
consin  corporation,  was  permitted  to  extend  its  line  into  the 
city  of  Winona  with  the  privileges  and  liabilities  of  railroad 
companies  organized  under  the  general  law  and  subject  to  the 
laws  regulating  the  "rate  of  taxation  or  rates  of  freight  and 
passenger  traffic"  as  pertaining  to  the  operation  and  use  of  its 
railroad  in  "Winona.""'^ 

There  were  considerable  sums  due  for  materials  and  serv- 
ices in  connection  with  the  construction  of  certain  lines  of 
road  of  the  St.  Paul  and  Pacific.  The  legislature  passed  a  law 
making  the  railroad  company  liable  for  all  these  debts  and 
providing  that  no  lands  accruing  to  the  company  were  to  be 
transferred  by  the  state  till  all  debts  due  to  citizens  of  the  state 

651.  General  Laws  of  Minn.,   1874,  cli.   31. 

652.  Special  Laws  of  Minn.,    1874,   cli.    10:!. 

653.  Ibid.,  cli.  106,  sec.  2. 

654.  Ibid.,   cli.   100. 


i 


RAILROAD  LEGISLATION   IN  MINNESOTA.  149 

were  paid,  and  if  those  de])ts  were  not  paid  within  six  months 
the  governor  was  authorized  and  directed  to  sell  public  lands 
held  for  the  company  to  pay  the  debts  to  pay  these  claim- 
ants.'"''"'' AVe  have  here  reflected  the  very  prevalent  hostile  sen- 
timent toward  absentee  claimants.  The  law  was  later  declared 
unconstitutional."'*"' 

Owing  to  the  financial  stringency  following  the  panic  of 
1878  the  St.  Paul  and  Pacific  had  been  unable  to  complete  two 
of  their  lines  in  the  northern  and  western  part  of  the  state 
within  the  time  specified  by  the  act  of  Congress  granting  the 
company  lands.  The  legislature  urgently  requested  Congress 
to  continue  the  land  grants  to  the  state  but  directed  the  ]\Iin- 
nesota  senators  and  representatives  in  Congress  not  to  permit 
the  passage  of  any  act  of  time  extension  which  did  not  grant 
the  lands  in  question  directly  to  the  state  of  jMinnesota  for  her 
to  grant  to  any  company  or  companies  on  such  conditions  as 
experience  had  shown  necessary  for  the  protection  of  the 
people."''" 

The  development  of  water  transportation  had  been  a  sub- 
ject of  special  interest  in  ]\Iinnesota  from  the  earliest  terri- 
torial days  but  during  the  farmers'  movement  during  the  early 
seventies  the  question  was  discussed  with  particular  enthu- 
siasm. Some  doubted  that  railroads  could  ever  transport 
bulky  freight,  such  as  grain,  great  distances  at  a  rate  reason- 
a])le  to  the  farmers.  IMany  grangers  believed  that  the  only 
way  to  bring  railroads  to  terms  was  to  l)ring  them  into  direct 
competition  with  water  transportation  wherever  possible. 
Newspapers  published  all  sorts  of  projects,  as  editorials  and 
in  their  correspondence  columns.  The  legislature  of  1874  re- 
flected the  public  opinion  of  the  time  by  its  unusually  large 
number  of  memorials  to  Congress  bearing  on  this  subject. 

One  joint  resolution  memorialized  Congress  to  cause  a  sur- 
vey to  be  made  of  the  water  routes  between  the  navigable 
waters  of  the  ^Minnesota  river  and  the  Red  river  of  the  North 
to  ascertain  the  feasibility  of  connecting  tlie  two  by  canal. "'^ 


655.  Ibid.,   ch.    105. 

656.  Minn.   Exec.  Docs.,   1876.  vol.   2,   p.  621. 

657.  General  Laws  of  Minn.,   1874,   p.  305,  .loint  Res.  No.   24. 

658.  Ibid.,   p.   2fn,   .loint   Ros.  No.  7. 


150  MINNESOTA  HISTORICAL  SOCIETY  COLLECTIONS. 

In  another  they  asked  for  an  appropriation  for  improving  the 
navigation  of  the  river  and  lake  of  St.  Croix.®^^  A  third  re- 
quested Congress  to  make  appropriations  for  the  improvement 
of  the  harbor  of  Duluth  to  keep  it  up  to  tlie  growing  necessi- 
ties of  tlie  Northwest.®*"  In  other  resolutions  they  requested 
their  senators  and  representatives  in  Congress  to  use  their  in- 
fluence to  secure  the  improvement  of  navigation  on  tlie  Mis- 
sissippi river*""  and  on  the  Minnesota  river""-  and  tlie  con- 
nection of  St.  Croix  river  with  Lake  Superior  by  canal,  locks 
and  dams.*"'*' 

It  was  believed  that  by  connecting  the  river  systems  of 
Minnesota  with  each  other  and  with  Lake  Superior  nearly  all 
parts  of  the  state  would  have  the  benefits  of  cheap  water 
transportation  and  of  reduced  rates  on  the  railroads  which 
were  in  competition.  Navigable  rivers  and  lakes  were  by  act 
of  Congress  under  the  direct  control  of  the  federal  govern- 
ment and  free  to  all,  hence  no  private  individual  could  mo- 
nopolize their  use.  The  case  of  canals  was  different  and  in  the 
last  mentioned  resolution  it  Avas  stipulated  as  a  condition  that 
the  proposed  canal  and  improved  water  courses  should  for- 
ever remain  under  control  of  the  United  States  government. 

It  is  not  to  be  understood  that  this  agitation  in  favor  of 
water  transportation  was  confined  to  Minnesota  and  that  it 
was  only  of  local  interest.  President  Grant  in  his  fourth  an- 
nual message  to  Congress,  December  2,  1872,  called  attention 
to  three  proposed  waterways  to  connect  the  West  and  the 
South  with  the  Atlantic  seaboard  and  recommended  that  a 
committee  or  commission  be  appointed  to  consider  the  whole 
question  of  cheap  transportation.""*  The  Senate  appointed  a 
select  committee  "to  investigate  and  report  upon  the  subject 
of  transportation  between  the  interior  and  the  seaboard."  This 
committee  spent  a  good  portion  of  the  year  1873  in  investigat- 
ing the  subject  of  transportation  and  in  its  report,  submitted 
to  the  Senate  in  the  spring  of  1874  it  discusses  at  length  a  num- 


659. 

Ibid.,   p.   307.  No.   26. 

660. 

Ibid.,   p.   302,  No.   19. 

661. 

Ibid.,  p.   294,  No.   12. 

662. 

Ibid.,  p.   297,  No.   15. 

663. 

Ibid.,   p.   299,  No.   17. 

664. 

Richardson,   Messages  and   Papers  of  the   Rresidents, 
vol.  VII,  p.  195. 

1780-1S97. 

RAILROAD  LEGISLATION  IN  MINNESOTA.  151 

ber  of  proposed  improved  waterways  and  canals  '^^■'  and  unani- 
mously recommends  four  water  routes  as  particularly  feasi- 
ble.*"'^ It  may  be  of  interest  to  note  that  the  chairman  of  this 
committee  was  Mr.  "Windom,  senator  from  Minnesota.  He  does 
not  seem,  however,  to  liave  taken  any  active  part  in  the  gran- 
ger movement  in  this  state. 

A  great  number  of  municipal  corporations  had  been  author- 
ized to  issue  bonds  in  aid  of  railroad  construction  by  the  leg- 
islature in  1873.  JMany  more  desired  the  same  privilege  in 
1874.  New  Ulm  had  by  a  four-fifths  majority  voted  to  give 
the  Winona  and  St.  Peter  a  right  of  way  through  that  city  and 
was  authorized  to  issue  bonds  for  this  purpose."^^  The  city 
council  of  Winona  had  resolved  to  issue  ])onds  to  the  amount 
of  fifty  thousand  dollars  in  aid  of  the  Green  Bay  and  Minne- 
sota railroad  company  when  authorized  by  the  legislature  to 
do  so.  The  legislature  gave  the  desired  consent.""^  Other  vil- 
lages, towns  and  counties  were  authorized  to  give  aid  to  rail- 
roads ^'^^  and  from  the  reports  of  the  railroad  commissioner  we 
learn  that  the  aid  given  was  considerable. 

War  was  being  waged,  not  against  railroads  but  against  rail- 
road management  and  railroad  claims  based  on  the  Dartmouth 
College  decision."^"  The  farmers  were  not  enemies  of  the  rail- 
roads but  they  were  determined  to  assert  the  supremacy  of 
tlie  people  over  everything  within  the  state,  including  railroads. 

CHAPTER  XIV. 

THE  SITUATION  IN  1874  AFTER  THE  ENACTMENT  OF  THE 
GRANGER  LAWS. 

The  new  railroad  law  was  variously  received  by  the  press 
of  the  state.     The  St.  Paul  Press  told  of  its  enactment  under 

665.  Senate  Report  30  7,  Part  I,  43d  Congress,  1st  Session;  Report  of 
the  Select  Committee  on  Transportation  Routes  to  the  Sea- 
board,  pp.   161-240. 

666.  Ibid.,  pp.  243-254;  see  also  Senate  Misc.  Doc.  No.  104,  43d  Con- 
gress,   1st   Session;   Mr.   Windom's   Resolution. 

667.  Special  Laws  of  Minn..   1874,  ch.   54. 

668.  Ibid.,  ch.  57. 

669.  Ibid.,   chs.  59,   61. 

670.  See  Chas.  Francis  Adams,  Jr.,  Railroads,  their  Origin  and 
Problems,  pp.  126-8;  E.  W.  Martin,  History  of  the  Grange  Move- 
ment, p.  335;  The  American  Law  Review,  .Jan.,  1874,  "The  Dart- 
mouth College  Case;"  and  the  following  Ch.  XVI. 


152  MINNESOTA   HISTORICAL,   SOCIETY    COLLECTIONS. 

the  headlines,  "The  People's  Triumph,  The  New  Railroad 
Law."  It  claimed  that  the  representation  of  the  railroads  in 
the  legislature  had  been  so  small  that  they  had  had  nothing 
to  say  in  its  enactment/'"'  The  ^linneapolis  Tribune  did  not 
consider  the  problem  solved,  but  believed  the  law  the  best  that 
could  have  been  devised  under  the  circumstances.  The  legis- 
lature had  not  "killed  the  iron  horse  to  gratify  the  insane 
caprices  and  spleen  of  some  fanatics  and  demagogues,"  but 
"had  at  least  put  a  snaffle  on  liim  and  a  curb  bit  to  hohl  liis 
rebellious  nose  in  subjection."  °'- 

The  Rochester  Post,  under  the  heading,  "Donnelly  and  the 
Railroad  Bill,"  would  not  claim  perfection  for  the  bill  in  all 
its  details,  but  gave  it  credit  for  incorporating  tlie  wisest  and 
most  judicious  thoughts,  deductions,  and  decisions,  of  the  best 
brains  and  the  clearest  heads  of  that  legislature."'^ 

The  Record  and  Union  (Rochester)  conservatively  ex- 
pressed its  belief  that  while  the  new  bill  was  an  advance  on 
that  of  1871,  it  would  not  prove  "adequate  to  the  consumma- 
tion desired."  ®"* 

On  the  other  hand,  the  St.  Paul  Dispatch  regarded  the  bill 
as  a  triumph  of  the  railroad  companies  and  objected  forcibly 
to  the  plenary  powers,  ministerial  and  judicial,  executive  and 
legislative,  which  had  been  granted  to  the  commission,  and 
considered  its  appointment  by  the  governor  as  a  dangerous 
grant  of  power  to  the  executive.**"'' 

Among  the  people  likeAvise  there  was  a  difference  of  opinion 
as  to  the  wisdom  of  the  new  law.  The  more  radical  Anti- 
monopolists  attacked  it  violently.  Amos  Coggswell,  an  Anti- 
monopolist  member  of  the  legislature,  in  a  speech  before  the 
Turtle  Creek  grange  in  Steele  county,  expressed  his  convic- 
tion that  the  law  would  be  a  complete  failure.  In  the  first  place 
it  was  unconstitutional  because  it  embraced  more  than  one 
subject  in  one  act,  besides  not  having  sections  ten  to  four- 
teen, referred  to  in  the  title.  In  the  second  place,  it  would 
afford  no  real  remedies.    He  did  not  believe  the  railroads  would 

St.  Paul   Daily  Press,  March  7,   1874,   p.   2,  c.   1. 

Minneapolis  Daily  Tribune,  March   7,   1874.   p.   2.  c.   1. 

Rochester  Post,  March  14,   1874. 

Record  and  Union,  March  13,   1874. 

St.  Paul  Daily  Dispatch,  March  6,  1874,  i>.  4,  c.  2. 


671 
672 
673 
674 
675 


RAILROAD  LEGISLATION    IN  MINNESOTA.  153 

pay  any  attention  to  the  commission  if  it  sliould  attempt  to 
reduce  rates."'''  A  more  general  sentiment  in  regard  to  the 
new  law  seems  to  have  been  that  while  it  would  not  cure  all 
the  evils  of  which  complaint  had  been  made,  still  it  would 
check  the  more  flagrant  wrongs,  such  as  discrimination  against 
persons  and  places.*'" 

As  members  of  the  new  board  of  railroad  commissioners, 
the  governor  appointed  ex-governor  AVm.  R.  IMarshall,  John 
J.  Randall,  and  A.  J.  Edgerton,  who  had  served  as  railroad 
commissioner  since  1871.  Though  some  were  disappointed  to 
find  that  the  Grange  was  not  represented  on  the  board,"'**  the 
appointees  seem  on  the  whole  to  have  been  quite  acceptable  to 
the  people. 

This  commission  had  been  created  to  bring  the  railroads 
into  subjection  to  the  law,  but  the  times  were  particularly  un- 
favorable for  carrying  out  any  disciplinary  measures.  The 
financial  stringency  following  the  panic  of  1873  had  increased 
rather  than  abated.  The  railroads  of  the  state  were  on  the 
verge  of  bankruptcy.  i\[oney  was  very  scarce  under  the  most 
favorable  circumstances,  and  bankrupt  railroads  under  the 
ban  of  the  law  could  offer  no  alluring  inducements  to  men  with 
capital.  Naturally  enough,  men  in  railroad  circles  believed 
that  this  ban  must  be  removed.  State  Senator  Drake,  presi- 
dent of  the  St.  Paul  and  Sioux  City  railroad  company,  in  a 
letter  to  J.  A.  Kiester,  said:  "It  may  as  well  be  laid  down 
at  once  as  a  maxim,  that  no  money  will  be  furnished  by  capi- 
talists from  abroad  or  at  home,  to  build  roads,  until  by  judicial 
decisions  or  otherwise  the  absolute  control  of  roads  when  built 
Avill  belong  to  those  who  built  them.  ""^^ 

The  railroads  felt  themselves  aggrieved.  There  was  little 
or  no  business,  and  they  were  in  no  mood  for  reducing  rates. 
In  Wisconsin  a  new  railroad  law  became  operative  by  publica- 
tion April  28.  President  Mitchell,  of  the  Chicago,  Milwaukee 
and  St.  Paul  railroad,  immediately  notified  the  governor  of 
that  state  that  the  board  of  directors  on  the  advice  of  able 


676.  Owatonna  Journal,  Apr.   9,   1874. 

677.  See   Farmers'  Union,   Apr.   11,    1874,    p.   100,   c.    3;   Resolutions   of 
Dodge  County  Council. 

678.  Anti-Monopolist,  Dec.   24,   1874;  Mr.   Parsons'  Address. 

679.  Anti-Monopolist,  July  23.  1874;  Mr.  Drake  on  Railroads. 


154  MINNESOTA   HISTORICAL   SOCIETY    COLLFJCTIONS. 

counsel,  and  after  due  deliberation,  believed  it  their  duty  to 
disregard  so  much  of  the  law  as  attempted  arbitrarily  to  fix 
rates  of  compensation  for  freight  and  passengers.*"''"'  AVhen 
this  became  known,  it  was  quite  generally  believed  that  the 
railroads  in  Minnesota  would  do  likewise,  and  the  people  did 
not  like  the  prospects  of  lengthy  and  expensive  litigation  which 
eventually  might  bring  no  relief.®'^^ 

The  commissioners  published  their  schedule  of  maxiiniun 
legal  rates  in  August.  In  preparing  this  schedule  they  could 
not  be  guided  by  any  rule  of  remunerative  interest  or  divi- 
dend on  legitimate  cost  and  operating  expenses,  for,  excepting 
the  River  Division  of  the  Milwaukee  and  St.  Paul,  the  rail- 
roads were  not  earning  remunerative  revenues.  Two  rail- 
roads were  in  the  hands  of  the  receiver,  three  had  defaulted  in 
interest  of  debts,  and  others  maintained  credit  by  assessment 
on  stockholders."*--  But,  though  operating  at  a  loss,  they  were 
guilty  of  unjust  discrimination  and  of  excessive  charges  at 
non-competing  points.  The  commissioners  tried  to  interfere 
as  little  with  the  control  and  regulation  of  the  roads  by  their 
owners  as  was  consistent  with  the  prevention  and  correction  of 
such  abuses. 

The  schedule  published  by  the  railroad  commissioners  di- 
vided freight  into  four  main  classes  and  ten  special  classes. 
Articles  of  freight  were  arranged  alphabetically  under  each, 
and  following  this  list  of  freights  came  a  statement  of  what 
each  road  might  charge  for  each  class  according  to  the  dis- 
tance transported.  Rates  were  somewhat  different  on  different 
roads,  but  the  same  rates  were  applicable  on  all  parts  of  the 
same  road.®*^ 

The  avowed  aim  of  the  commissioners  Avas  not  to  reduce 
rates  but  to  remedy  abuses.  According  to  the  law  of  1874, 
competition  at  a  certain  point  did  not  constitute  a  valid  ex- 
cuse for  lowering  rates  to  and  from  that  place.  If  the  sched- 
ule of  the  commission  had  been  rigidly  enforced,  rates  would 


Wisconsin   Railroad   Commission   Report,    1874,   app.,   pp.   1-4. 

Minneajiolis   Daily  Tribune,   July   16,    1874. 

Railroad   Commissioner's  Report,   1874,   p.   6. 

St.  Paul  Weekly  Pioneer  Press,  Aug.  6,  1874,  Supplement,  gives 

official  publication  of  schedulos. 


680. 

681. 

682. 

683. 

RAILROAD  LEGISLATION  IN  MINNESOTA.  155 

have  been  raised  at  the  so-called  coinpetitiA'e  points  and  low- 
ered at  the  intervening  points. 

The  competing  points  were  as  a  rule  centers  of  popula- 
tion and  of  industry.  To  a  large  extent  they  had  been  made 
so  through  railroad  discrimination.  Any  increase  in  rates 
would  naturally  meet  with  protest  at  such  places. 

The  railroad  companies  in  INIinnesota,  unlike  those  in  Wis- 
consin, did  not  openly  refuse  to  comply  with  the  new  sched- 
ule. As  stated  in  New  York  Tribune  editorials,  the  railroads 
rather  expressed  their  intention  of  trying  to  accommodate 
themselves  to  the  new  rates.^^*  When  the  schedule  went  into 
effect  legally,  the  railroad  companies  actually  raised  rates  at 
a  number  of  places,  and  the  opponents  of  the  new  law  attacked 
it  violently.  The  Anti-]Monopolist  called  it  a  fizzle  and  a  fraud, 
and  held  it  to  be  quite  natural  that  the  railroads  should  accept 
the  schedule  of  the  commission.''^''  The  St.  Paul  Dispatch  said 
the  "Grange  ironclad  railroad  law"  worked  reform  with  a 
A'engeance,  and  went  on  to  show  how  rates  had  been  raised  on 
the  St.  Paul  and  Pacific.^*" 

The  reduction  of  rates  at  non-competing  points  was  slight 
and  was  no  source  of  great  satisfaction  to  the  farmers.  Any 
reduction  made  at  such  places  was  more  than  counterbalanced 
in  the  minds  of  the  people  by  raised  rates  at  other  points. 
Where  the  traffic  was  small  and  the  rates  were  lowered,  the 
railroad  companies  gave  slower  and  inferior  service,  besides 
withdrawing  from  service  as  many  trains  as  they  possibly 
could.  They  informed  their  patrons  that  tbey  were  losing 
money  as  it  was  and  consequently  had  to  reduce  expenses  in 
all  ways  possible.  The  St.  Paul  and  Sioux  City  threatened  to 
withdraw  a  passenger  train  on  their  line  unless  they  were  per- 
mitted to  charge  five  cents  per  passenger  mile.  The  people 
along  the  road  petitioned  the  railroad  commission  to  permit 
this  charge,  and  the  commission  complied  with  their  request. 
The  Owatonna  Journal  in  commenting  on  this  incident  says : 


684.  New  York  Daily  Tribune,  Aug.  5,  1874,  p.  4,  c.  4,  "The  Railway 
Problem  in  Minnesota;"  Aug.  10,  1874,  p.  4,  c.  3,  "Minding 
Other  People's  Business."  See  also  The  Railroad  Gazette,  Aug. 
15,   1874,  p.  314;  Anti-Monopolist,  Aug.  13,   1874. 

685.  Anti-Monopolist,  Aug.   13,   1874. 

686.  St.  Paul  Daily  Dispatch,  Aug.  6,  1874. 


15B  MINNESOTA    HISTORICAL    SOCIETY    COLLECTIONS. 

"Tally  one  for  the  company.    What  company  will  next  threaten 
to  withdraw  a  train?""" 

The  railroad  commissioners  liad  to  deal  gently  with  the 
bankrupt  companies  and  this  attitude  was  frequently  inter- 
preted as  an  indication  that  they  were  in  "cahoots  with  the 
railroads."  The  commission  cost  the  state  ten  thousand  dol- 
lars a  year.  This  was  a  material  increase  in  state  expenses, 
and  it  was  feared  that  expensive  litigation  would  add  to  the 
burden.  The  grangers  did  not  work  in  harmony,  and  this  in- 
ternal discord  had  a  deadening  effect. 

Besides  appointing  the  so-called  lobbying  committee,  which 
met  with  so  much  disfavor,  the  State  Grange  executive  com- 
mittee also  appointed  a  special  committee  to  investigate  and 
report  on  the  ^Minnesota  Farmers'  ^lutual  Fire  Insurance 
Association,  }>opularly  called  the  Farmers'  Association."" - 
This  organization  had  started  in  1865  as  a  farmers'  association 
for  mutual  aid  in  case  of  fire,  and  was  incorporated  under  the 
laws  of  the  state  in  1867.'""'  It  was  extensively  advertised  in 
the  Farmers'  Union,  which  l)egan  publication  as  a  monthly  in 
August,  1867.  !Mr.  W.  A.  Nimocks,  the  editor  of  this  i\Iinne- 
apolis  farm  paper,  was  secretary  of  the  association.  In  1869 
its  membership  ninubered  over  four  thousand,'''"'  and  it  claimed 
to  insure  at  the  rate  of  seventeen  cents  per  thousand  dollars."^^ 
In  1873  the  State  CJrange  took  preliminary  steps  towards  ab- 
sorbing the  association,  and  a  committee  appointed  by  the 
State  Grange  to  investigate  made  a  very  favorable  report  to 
the  state  convention  in  December.  They  reported  fifteen  thou- 
sand farmers  insured,  one  hundred  thousand  dollars  paid  out 
in  losses,  and  insurance  at  one-third  the  usual  cost.""'- 

But  the  committee  ai)pointed  by  the  executive  committee 
presented  a  far  different  report.  The  company  was  declared 
unsound.  They  claimed  that  there  was  only  $r)0,762.15  on  hand 
to  meet  the  liabilities  of  12,752  policies  covering  if;9.622,d84, 


687.  Owatonna  Journal,   Dec.   3,   1874. 

688.  Farmers'  Union.  March  7  ,1874. 

689.  Ibid.,  Aug.,   1867,   Vol.   1,   No.   1. 

690.  Ibid.,  Aug-.,    1869. 

691.  Ibid.,   April,  1869. 

692.  Ibid..   Dec.   27,   1873. 


RAILROAD  LEGISLATION  IN  MINNIOSOTA. 


157 


and  condemned  the  business  management  of  the  eulerprise.®^^ 
This  adverse  report  greatly  exasperated  the  grangers.  They 
believed  that  the  chairman  of  the  committee,  ]\Ir.  Sherwood, 
had  for  personal  reasons  tried  to  discredit  the  association.^^* 
Its  officers  immediately  published  a  lengthy  rei)ly  to  this  re- 
port and  assured  the  public  that  tlie  association  was  sound  to 
the  core,*"''"  and  it  seems  that  they  were  given  greater  credence 
than  ]\Ir.  Sherwood's  committee. 

The  Patrons  had  from  the  beginning  been  interested  in 
co-operation.  They  had  frecpiently  tried  to  unite  and  elimi- 
nate the  "middleman's  profit,"  and  while  many  of  their  ven- 
tures were  not  particularly  successful  it  was  generally  believed 
that  their  activities  had  forced  retailers  to  reduce  their  prices 
materially.  In  1873  the  executive  committee  of  the  State 
Grange  had  appointed  a  state  agent  to  carry  out  co-operative 
plans.  The  agent,  Mr.  J.  S.  Denman,  on  his  own  responsibility 
organized  a  Patrons'  Co-operative  Society  and  incorporated  it. 
He  made  the  headquarters  of  the  society  at  Winona,  but 
planned  to  establish  sub-agencies  in  the  different  counties. 
No  distinction  was  made  among  those  who  dealt  with  the  so- 
ciety, a  small  commission  being  charged  of  all  whether  patrons 
or  not."^** 

Mr.  Denman 's  announcement  of  his  plans  created  a  great 
stir.  He  was  denounced  as  a  middleman  because  he  charged 
a  regular  commission.  He  was  accused  of  having  acted  with- 
out authority  in  incorporating  the  state  agency.  His  action 
was  officially  investigated  and  declared  illegal.  The  State 
Grange,  at  its  meeting  in  December,  1873,  would  not  recognize 
him  as  its  agent  nor  sanction  any  of  his  acts."''^  Nevertheless 
the  grange  proceeded  to  create  the  office  of  state  agent,  at- 
taching a  salary  of  fifteen  hiuidred  dollars,  and  unanimously 
elected  Mr.  Denman  to  this  position. '^'"^  But  though  the  lead- 
ers tried  to  smooth  over  the  difficulty,  the  mistrust  and  ill  feel- 


693.  St.  Paul  Daily  Dispatch,  Feb.  25,  1874;  Farmers'  Insurance  Com- 
pany  (a  four  column  report). 

694.  Farmers'  Union,  March   7,   1874. 

695.  St.   Paul   Dispatch,   March   3,   1874,   "The  Other  Side." 

696.  Farmers'  Union,  Nov.  22,  1873,  "The  'fifth  wheel'  in  the  Grange;" 
Dec.   13,   1873,   "What  is  it?"   Dec.   20,    1873. 

697.  Ibid.,   Dec.   27,   1873;   "The   Duty  of  the  Patrons." 

698.  Ibid. 


158  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

ing  was  not  altogether  swept  away.  Many  who  liad  been  at- 
tracted to  the  order  because  of  its  co-operative  features  were 
disappointed  and  lost  interest  in  the  grange  work. 

State  Master  Parsons  had  in  a  large  measure  checked  tlie 
formal  participation  of  grangers  in  the  campaign  of  1873. 
Mr.  Donnelly's  plan  to  create  a  new  granger  party  liad  mis- 
carried, but  nevertlieless  tlie  granges  had  been  an  important 
factor  at  the  polls  and  in  the  legislature. 

In  the  winter  of  1874  Mr.  Donnelly  resumed  his  efforts  to 
organize  an  independent  anti-monopoly  party.  Tlie  anti-mo- 
nopolist members  of  the  legislature  met  while  the  legislature 
still  was  in  session,  and  a  committee  of  five  was  appointed  to 
prepare  an  address  to  the  people  of  the  state. ®^^  The  address 
aimed  to  show  that  what  good  had  been  accomplished  by  the 
legislature  was  to  the  credit  of  the  anti-monopolists,  and  that 
the  best  measures  and  real  reform  had  been  blocked  by  the 
Republican  majority.  All  friends  of  reform  were  invited  to 
meet  in  every  township  of  the  state  June  27  to  elect  delegates 
to  county  conventions. '^^  There  were  at  the  time  over  three 
hundred  active  granges  in  the  state.  AVilliam  Paist,  secretary 
of  the  State  Grange,  was  chairman  of  the  committee  which 
prepared  the  anti-monopolist  address.  Nominally  through  him, 
the  anti-monopolist  address  and  circulars  were  sent  to  all  the 
granges  of  the  state  to  be  read  at  their  meetings.'^^^  Later  Mr. 
Donnelly  assumed  all  responsibility.'^"-  This  irregular  proced- 
ure met  with  the  approval  of  some  grangers,'''"  but  on  the 
whole  it  seems  to  have  been  strongly  resented.  For  instance, 
the  Lone  Cedar  Grange,  in  a  spirited  reply  to  the  request  to 
have  the  anti-monopolist  circulars  presented  to  the  grange  by 
its  officers,  treated  this  request  as  an  insult,  because  grange 
officers  were  under  solemn  obligation  not  to  use  their  position 
to  influence  any  member  in  matters  of  politics  or  religion.'"* 

A  i)rominent  Patron  of  Hennepin  county  sent  in  a  com- 
plaint to  Grand  Master  Adams  of  tlie  National  Grange,  and 

699.  Address  of  the  Anti-MonopoHst  Party,   1S74. 

700.  Farmers'  Union,  March  14,  1874.     See  also  Address  of  the  Anti- 
Monopolist  Party,  1874. 

701.  Farmers'  Union,  March   21,   1874. 

702.  Ibid.,   May   ?,0.   1874. 

703      Ibid.,   March   21,   1874;   Idler  from   ".\    Burns  Granger." 
704.      Ibid.,  June  13,   1874. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  159 

received  the  following  reply:  ''I  have  no  doubt  but  the  Mas- 
ter of  your  State  Grange  will  promptly  apply  the  correction 
to  any  subordinate  grange  that  will  so  far  forget  its  constitu- 
tional obligations  as  to  take  part  in  partisan  politics.  I  fully 
agree  with  you  that  our  Order  must  not,  as  such,  become  a 
political  organization ;  but  I  most  earnestly  hope  that  our  mem- 
bers will  be  true  to  their  duty  as  American  citizens  and  take 
an  active  and  prominent  part  in  moulding  the  institutions  and 
laws  of  our  country."  ^"^ 

State  Master  Parsons  then  published  the  following  notice, 
dated  July  11,  1874:  "Upon  any  complaint  made  to  me  that 
any  Grange  in  this  jurisdiction  has  violated  article  XIII  of  the 
constitution  of  the  National  Grange  [prohibiting  political 
activity],  I  shall  not  hesitate  to  suspend  that  Grange  and  ask 
the  Worthy  Master  of  the  National  Grange  to  revoke  its  char- 
ter upon  proof  of  guilt  after  hearing. "  ^''^ 

Mr.  Donnelly  immediately  began  an  attack  on  Mr.  Par- 
sons for  this  action,  accusing  him  of  having  issued  the  notice 
for  partisan  purposes,  namely,  as  in  1873,  to  save  the  Repub- 
lican party  from  disruption.  Again  a  lively  discussion  was 
evoked.  Those  who  had  joined  the  order  to  secure  legislative 
reform  were  not  content  *'to  amuse  themselves  with  running 
little  parlor  machines  while  others  ran  the  government. ' '  '^°^ 
The  more  radical  members  looked  upon  Mr.  Parsons'  action  as 
despotic,  and  became  thoroughly  dissatisfied  with  the  order. 

Men  of  all  sorts  of  opinions  had  joined  the  grange,  and 
often  for  widely  differing  purposes.  In  the  enthusiasm  of  or- 
ganization each  one  confidently  looked  to  the  order  for  the 
realization  of  his  ideals.  The  work  of  organization  continued 
to  flourish  and  the  number  of  granges  was  greatly  increased,^"* 
but  misunderstandings  and  disputes  are  fatal  in  any  fraternal 
order.  While  the  growth  of  the  order  was  at  its  height,  re- 
ports began  to  spread  that  it  was  dying.    As  early  as  January, 


705.  Anti-Monopolist,   July   30,   1874. 

706.  Ibid.,Jiily  30,   1874. 

707.  Ibid.,  July  16,  1874;  letter  from  Lewis  Porter,  a  Patron,  to  the 
Rochester  Record  and  Herald. 

708.  Grange  Advance,  Dec.  22,  1874,  Meeting  of  Minnesota  State 
Grange.  State  Master  Parsons  reported  the  organization  of 
142  granges  in  Minnesota,  and  12,000  in  the  United  States  and 
Canada,  during  the  year  1874. 


160  MINNESOTA    HISTORICAL   SOCIETY    COLLECTIONS. 

1874,  while  granger  legislatures  were  in  session  in  several 
states,  The  Nation  had  almost  proplietieally  said:  "The  farm- 
ers' movement,  politically  considered,  has  indeed  passed  in  the 
last  few  months  through  the  various  stages  of  progress  from 
birth  to  decay  and  dissolution,  to  which  all  movements  of  the 
sort  seem  nowadays  to  be  destined."'"'-'  Tliis  ])ublication  w^as 
not  in  sympathy  with  the  farmers'  movement,'"'  and  was  not 
blinded  by  enthusiasm  for  its  ])rogress. 

The  Grange,  however,  protested  life  and  vitality.  In  De- 
cember the  Grange  Advance  gives  as  a  news  item  that  there 
were  at  that  time  21,472  organized  granges  in  the  United 
States,  an  increase  of  364  during  the  last  month.  It  then  asks. 
Does  this  look  much  like  dying?  But  the  item  is  immediately 
folloAved  by  this  comment:  "Patrons  "who  are  now  will- 
ing to  desert  the  field  on  account  of  some  little  neighborhood 
troubles  or  personal  differences  are  like  men  who  have  plowed 
the  ground,  obtained  and  sowed  the  seed,  and  watched  the 
crop  to  maturity,  refusing  to  harvest  because  neighbor  Jones, 
or  Smith,  or  Jenkins,  have  killed  their  bull  pup."''^  It  is 
evident  that  the  patrons  themselves  recognized  signs  of  dis- 
loyalty and  indifference  within  their  ranks. 

The  campaign  conducted  in  ]\Iinnesota  in  the  summer  and 
fall  of  1874  was  not  very  exciting.  Hard  times  dampened  the 
enthusiasm  of  the  people.  Mr.  Donnelly  failed  to  arouse  the 
interest  of  the  farmers  in  his  Anti-JMonopoly  party,  and  the 
grangers  seem  to  have  taken  no  active  part  in  the  campaign  in 
any  way."^-  The  question  of  railroads  and  monopolies  did  not 
come  up  for  serious  discussion.  At  the  election  the  Republi- 
cans elected  twenty-four  state  senators,  and  the  Democrats 
seventeen.  Sixty  Republicans  and  forty-six  Democrats  Avere 
elected  members  of  the  lower  house. 

The  State  Grange  met  in  Mankato  December  15,  1874.     In 


709.  The  Nation,   vol.   18,   p.   55,   "The   Farmers'   Future." 

710.  Ibid.,  vol.  16,  see  Index,  under  The  Week,  "Railroad  excite- 
ment in  Illinois;"  p.  249,  "The  Farmers'  Clubs,  and  the  Rail- 
roads;" p.  329,  "The  Latest  Reform  Movement;"  p.  397,  "The 
Grangers  and  the  Judges;"  vol.  17,  see  Index  under  The  Week, 
"Farmers'  Fallacy."  etc.;  vol.  18,  pp.  55,  325,  340,  294,  "The 
Cheap  Transportation  Report;"  vol.  19,  p.  36,  "The  Granger 
Method   of   Reform;"    p.   199,   "The   Right   to  Confiscate." 

711.  Grange  Advance,  Dec.   22,   1874,  P.  of  H.  column. 

712.  Record  and  Union,  Dec.  11,  1874. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  161 

his  opening  address  State  jMaster  Parsons  strongly  condemned 
the  new  railroad  law,  asserting  that  the  operation  of  that  law 
as  executed  was  an  actual  aggravation  of  the  evil.  He  l)e- 
lieved,  however,  that  one  end  had  been  gained,  namely,  that 
"We  hear  no  more  of  chartered  rights  above  and  beyond  tlie 
power  of  the  legislature  to  restrict.  For  reasons  obvious  to 
the  dullest  understanding,  the  corporations  affected,  with  one 
accord,  make  haste  to  yield  a  ready  obedience  to  the  beliest 
of  the  Commissioners.  The  fault  of  this  condition  of  things  is 
not  to  be  found  in  the  provisions  of  the  law  itself,  but  in  the 
execution  of  those  provisions.  The  measure  wliich  we  had 
fondly  hoped  would  afford  a  relief  from  our  burdens,  has  l)een 
turned  against  us  and  made  an  agent  of  still  greater  oppres- 
sion." "^ 

He  reported  some  progress  during  the  past  j-'ear  by  way  of 
securing  competition  among  sellers  and  thereby  reducing  the 
prices  of  all  goods  bought  by  the  farmer.  He  believed  tliat 
cheaper  transportation  could  be  secured  on  the  same  principle 
by  bringing  water  transportation  into  competition  with  the 
railroads."* 

At  this  convention  the  following  resolutions  were  drawn  up 
and  were  adopted,  it  is  said,  with  enthusiasm : 

Whereas,  One  of  the  greatest  causes  of  the  general  industrial  de- 
pression is  the  want  of  cheap  means  of  transportation  to  the  sea- 
hoard;  and 

Whereas,  This  result  can  only  be  obtained  by  competition,  secured 
by  the  opening  of  water  channels  between  the  Mississippi  and  the 
ocean  by  way  of  our  lakes  and  rivers;   therefore. 

Resolved,  That  we  cordially  endorse  the  report  of  the  select  com- 
mittee on  transportation  submitted  to  the  Senate  during  the  first  ses- 
sion of  the  Congress.     *     *     *     * 

Resolved,  That  the  present  state  law  for  the  regulation  of  rail- 
roads is  expensive  and  useless  to  the  people  and  vexatious  to  the 
roads,  and  we  demand  its  repeal,  and  in  the  name  of  20,000  voters  we 
demand  the  passage  of  a  law  that  shall  guarantee  cheap  transporta- 
tion for  the  productions  of  the  farm,  especially  wheat. 

Resolved,  That  we  propose  to  exercise  our  right  of  franchise  in 
defence  of  our  own  interests,  and  we  promise  to  act  unitedly  at  the 


713.  Anti-Monopolist,    Dec.   24,    1874;   Grange  Advance,   Dec.   22,    1874. 

714.  Ibid. 
11 


162  MINNESOTA   HISTORICAL    SOCIETY    COLLECTIONS. 

ballot  box  against  those  who  prove  themselves  hostile  or  indifferent 
to  our  welfare. 

Resolved,  That  while  religion  or  politics  should  not  be  discussed 
in  the  work  of  the  Order,  we  hold  that  each  Grange  has  a  right,  and 
that  it  is  a  duty,  to  discuss  and  understand  all  the  great  economic 
questions  of  taxation,  which  underlie  our  prosperity  as  a  people,  and 
that  we  propose  to  exercise  that  right,  regardless  of  its  effects  upon 
political  parties  or  politicians. 

Resolved,  That  Minnesota's  true  outlet  for  her  production  to 
Eastern  markets  is  via  Lake  Superior,  and  we  call  upon  the  legisla- 
ture of  the  state  at  its  coming  session  to  make  an  appropriation  for 
a  survey  of  the  watershed  between  the  St.  Croix  and  Lake  Superior 
to  ascertain  the  best  route  and  the  lowest  cost  of  a  canal  between 
them.715 

The  Grange  also  endorsed  the  project  of  opening  the  Fox 
and  Wisconsin  rivers  that  the  people  of  the  Northwest  might 
have  another  opening  by  water  to  the  Great  Lakes. 

These  resolutions  would  seem  to  indicate  that  the  grangers 
still  had  an  interest  in  politics.  They  here  proposed  a  defi- 
nite legislative  program,  and  while  they  did  not  come  out  as 
a  new  political  organization  they  did  pledge  themselves  to  act 
unitedly  at  the  ballot  box  against  candidates  who  were  hos- 
tile or  indifferent  to  their  plans.  They  tried  to  make  a  distinc- 
tion between  politics  and  partisan  politics,  whicli  does  not  seem 
to  liave  been  made  clear  to  anyone.  As  was  said  in  a  letter 
to  the  Anti-Monopolist:  "The  great  question  is  settled  at  last. 
The  Grangers  can  discuss  whatever  they  please  except  partisan 
politics.  As  no  one  has  ever  even  wanted  to  discuss  partisan 
polities,  not  even  Donnelly,  I  suppose  those  little  creatures  who 
were  in  favor  of  the  'hush  up  policy'  will  hide  their  heads  in 
shame  and  silence.  If  State  Master  Parsons  had  said  'partisan 
politics'  there  would  have  been  no  controversy  about  the  mat- 
ter.""" 

Col.  Samuel  E.  Adams  was  elected  State  Master  to  suc- 
ceed Mr.  Parsons.  Mr.  Donnelly  tried  to  make  political  cai)ital 
out  of  this  fact,  construing  it  as  a  disapproval  of  Mr.  Parsons' 
action  in  forbidding  political  activity  on  the  part  of  granges. 
In  the  Anti-Monopolist  he  said:     "The  State  Grange  draws  a 


■15.      Anti-Monopolist,   Dec.   24,   1874. 
'16.      Ibid.,  Aug-.   ],■?,   1874. 


RAILROAD  LEGISLATION   IN  MINNESOTA.  163 

long  breath  of  relief.  The  old  man  of  the  mountain  who  had 
so  long  ridden  it  is  no  more.  Parsons  is  dropped  out  of  sight 
deeper  than  plummet  ever  sounded.  *  *  *  He  preserved 
the  Republican  party  in  power  at  the  expense  of  the  Patrons 
of  Husbandry.  He  tried  to  emasculate  the  Order  and  to  reduce 
its  members  to  silence  and  notliingness.  But  for  his  presence 
we  should  today  have  one  thousand  subordinate  Granges  in 
IMinnesota,  instead  of  five  liundred." ''" 

With  a  new  state  master  and  a  set  of  resolutions  so  strongly 
tinged  witli  politics,  the  State  Cjrang(^  to  all  appearances  Avas 
about  to  enter  tlie  political  arena.  As  a  matter  of  fact,  how- 
ever, the  grange  masters  in  convention  did  not  by  these  reso- 
lutions truly  express  the  sentiments  of  tlieir  subordinate 
granges.  The  resolutions  were  not  the  spontaneous  product  of 
grange  enthusiasm.  They  not  only  failed  to  arouse  enthusiasm, 
hut  in  many  instances  they  met  witli  determined  opposition. 
Several  subordinate  granges  passed  resolutions  protesting 
against  the  demanded  repeal  of  the  railroad  laws.'^®  The 
grangers  Avere  not  prepared  to  take  any  united  action  at  the 
])allot  box  at  this  time.  ]Many  believed  that  Mr.  Donnelly  was 
l)ack  of  this  movement,  and  later  in  a  speecli  in  the  state  senate 
he  acknowledged  liis  authorship  of  tlie  resolutions.''-' 

]Mr.  Parsons  was  not  re-elected  state  master,  but  to  con- 
strue tliis  as  a  disavowal  of  his  policy  of  keeping  the  grange 
out  of  politics  does  not  seem  to  be  warranted.  ]\Ir.  Donnelly, 
as  we  have  seen,  was  bitterly  opposed  to  Mr.  Parsons  person- 
ally, and  undoubtedly  had  influence  in  bringing  about  his  de- 
feat. But  Colonel  Adams,  a  war  Democrat,  who  was  elected 
to  succeed  him,  was  in  favor  of  the  same  general  policy  as  Mr. 
Parsons,  and  he  says  that  this  ([uestion  did  not  come  up  as  an 
issue  in  the  election.^-" 


717.  Ibid.,  Dec.  24,  1874. 

718.  Rochester  Post,  March   6,   1875. 

719.  Owatonna  Journal,  March   4,   1875. 

720.  In  an  Interview  at   his  home   in  Minneapolis.   July   27,    1909. 


164  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

CHAPTER  XV. 

THE  GRANGER  LAWS  REPEALED  AND  A  NEW  RAILROAD  LAW 

ENACTED  IN  1875. 

The  railroad  law  of  1874  had  proved  disappointing.  It  was 
enacted  to  curb  the  arbitrary  power  of  the  railroads  and  to 
make  them  amenable  to  state  control ;  ])iit,  owing  to  the  finan- 
cial stringency  following  the  panic  of  187o,  it  had  been  im- 
possible to  give  it  what  its  friends  would  call  a  fair  trial. 
Business  was  at  a  stand-still,  and  the  railroads  were  unable  to 
meet  their  obligations  incurred  in  times  of  optimism  and  pros- 
perity. At  the  State  Grange  an  attempt  had  been  made  to  re- 
vive interest  in  further  railroad  regulation,  but  it  met  with  no 
hearty  response.  By  the  winter  of  1875  the  state  press  had 
come  to  an  almost  unanimous  decision  in  favor  of  an  about- 
face  in  the  railroad  policy  of  the  state. 

The  St.  Paul  Press  considered  the  practical  results  of  the 
law  "mischievous  in  the  extreme,"  and  believed  it  "univer- 
sally demonstrated,  because  experience  has  painfully  admitted, 
that  the  experimental  legislation  of  last  winter  in  this  state 
was  a  disastrous  mistake,"  though  administered  leniently."-^ 

The  iMinneapolis  Tribune  characterized  the  farmers'  move- 
ment as  a  senseless  railroad  war.  In  its  judgment  "ten  years 
will  not  suffice  to  repair  the  injury  to  the  state  which  the  law 
has  inflicted.  *  *  *  The  railroad  war  of  the  West  is  re- 
sponsible to  a  great  degree  for  the  hard  times  of  which  we 
have  been  complaining  so  much  recently. ' '  "-- 

The  St.  Paul  Dispatch  said:  "The  mistake  which  has  been 
made  in  this  war  upon  railroads  is  now  very  generally  con- 
ceded, and  few  have  the  temerity  to  longer  attempt  to  ride 
upon  the  commune  sentiment  as  a  political  hobby. ' ' ' --^  And 
again:  "The  comments  of  the  Stillwater  IMessenger,  reprinted 
elsewhere,  reflect  the  sentiment  of  nine-tenths  of  the  peoi)le  of 


721.  The   St.   Paul   Daily   Tress,   Feb.   26,    1875,   p.    2,   c.    1 :    "Repeal   of 
the   Railroad   Law." 

722.  The   Minneapolis   Tribune,   March    5.    1875,   p.    2,   c.    1;    "The   New 
Railroad  Law." 

723.  St.   Paul    Daily   Di.'^patch,   Jan.    21,    1875,    \>.    2.   c.    2;      Paralyzing 
Business." 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


165 


Minnesota.  We  can  call  to  mind  hut  three  newspapers  '-^  of 
the  state,  which  have  given  expressions  to  opinions  in  favor 
of  the  present  law  or  any  law  regulating  railroads.  AYe  know 
the  business  portion  of  the  community  desire  to  see  the  rail- 
road restriction  removed. ' '  ' -' 

The  St.  Cloud  Press  observed:  ''Never  before  in  this  coun- 
try have  the  railroad  interests  felt  the  result  of  unjust  laws 
more  than  now.  Never  before  have  the  people  felt  the  result 
of  these  laws  with  the  same  bitterness  as  now.^-*' 

The  Grange  Advance,  a  grange  organ,  in  discussing  the  law 
of  1874,  said:  "It  was  an  illy  advised  law  gotten  up  in  a 
hurry  near  the  close  of  the  session  as  an  excuse  for  not  doing 
anything  else,  providing  for  three  commissioners  who  should 
stand  between  the  people  and  the  legislature  and  bear  the 
odium  of  the  failure. ' '  "^ 

The  AYisconsin  State  Grange  in  its  annual  meeting,  Jan- 
uary 14,  1875,  in  speeches  and  by  resolutions,  called  for  modifi- 
cations in  their  granger  laws.^-*  The  Wisconsin  railroad  com- 
missioners reported  that  the  Potter  law  had  proved  a  failure.'-^ 
Governor  Taylor  likewise  frankly  admitted  that  railroad  reg- 
ulation in  Wisconsin  had  not  been  a  success.'""  News  of  this 
kind  was  circulated  freely  by  the  press  in  ]\Iinnesota.  When 
the  state  legislature  convened  in  St.  Paul  in  1875,  it  seemed 
that  the  "country  press  joined  with  the  city  press  in  demand- 
ing such  modifications  in  the  legislation  as  will  enable  railroads 
to  operate  at  a  fair  profit. ' '  '  ^^ 

IMr.  Edgerton,  one  of  the  railroad  commissioners,  made  a 


724.  These  probably  were  the  Rochester  Post  (see  Feb.  27,  1875), 
Ovvatonna  .Journal  (see  March  4,  1875),  and  Record  and  Union 
(see  Feb.  5,  1875).  I  found  no  other  papers  that  stood  by  rail- 
road  control,   and   these  recognized    the   sentiment  against   it. 

725.  St.  Paul  Daily  Dispatch,  Feb.  9,  1875,  p.  2,  c.  1;  "A  very  gen- 
eral  sentiment." 

726.  Reprinted  in  the  St.  Paul  Daily  Dispatch,  Jan.  19,  1875,  p.  3, 
c.   1. 

727.  Grange  Advance,  March   2,   1875. 

728.  St.   Paul   Daily   Dispatch,  Jan.   19,   1875. 

729.  Ibid.,  Jan.  9,  1875,  p.  3,  c.  1;  St.  Paul  Daily  Pioneer,  Feb.  17. 
1875,    p.   2,   c.    1;    "The  Potter  Law." 

730.  St.  Paul  Daily  Dispatch,  Jan.  21.  1875,  p.  2,  c.  2;  "Paralyzing 
Business." 

731.  Minneapolis  Tribune,  Jan.  16,  1875,  p.  2,  c.  1;  "Steps  that 
should  be  retraced;"  reprinted  in  St.  Paul  Daily  Dispatch, 
Jan.    21,   1875,   p.   2,   c.   2. 


166 


MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 


speech  at  IMantorville  wliicli  heeame  generally  known  as  the 
"confiscation  speecli."  The  St.  Paul  Pioneer  in  coiuin exiting 
on  the  address  said:  "He  shows  tliat  he  has  compelled  the 
AVinona  and  St.  Peter  railroad  to  run  at  a  cost  of  $30,000  a 
year  beyond  their  receii)ts,  and  then  he  asks :  Now  let  me  ask 
any  responsil)Ie  nuin  if  he  would  advise  any  greater  reduction 
on  this  road  till  the  results  of  a  few  months  would  demonstrate 
its  possibility.  In  other  words  he  says,  Can  we  put  our  hands 
deeper  into  the  pockets  of  the  owners  of  this  road,  until  we 
find  whether,  after  the  end  of  a  few  months,  they  have  any 
more  money  left  for  us  to  take."  The  paper  goes  on  to  char- 
acterize the  plan  of  the  railroad  commission  as  a  cool  and  de- 
liberate scheme  of  legalized  plunder.'''"- 

Tlie  Owatonna  Press  declared:  "A  gang  of  highway  i-ob- 
bers  would  not  improve  this  statement.  Not  content  with  tak- 
ing away  all  the  profits  of  the  AVinona  and  St.  Peter  road,  the 
owners  are  compelled  to  lose  over  $30,000  yearly.  *  *  * 
Is  there  any  wonder  there  is  'hard  times?'  Let  justice  be 
done  though  the  heavens  fall.""''^  Strange  as  it  may  seem, 
the  Winona  and  St.  Peter  railroad  company,  which  had  been 
the  main  factor  in  exciting  the  railroad  war  in  1870,  and  which 
again  in  3873  had  been  the  chief  object  of  attack,  was  now 
pictured  as  suffering  injustice  at  the  hands  of  men  who  had 
been  appointed  to  bring  relief  to  an  oppressed  people. 

The  general  belief  seems  to  have  been  that  the  granger 
movement  was  more  or  less  directly  the  cause  of  the  financial 
depression.  The  railroad  law  and  the  panic  became  associated 
in  the  minds  of  the  peoi)le  as  cause  and  eit'ect, — they  were  now 
suffering  the  "quick  return  which  communism  always  reaps 
for  aggressive  assaults  upon  the  bulwarks  of  national  exist- 
ence." "* 

It  may  be  true,  as  Governor  Davis  said  in  his  message  to 
the  legislature  in  1875,  that  IMinnesota  Avas  not  so  badly  af- 
fected by  the  panic  as  other  states,  but,  after  all,  this  was  poor 
consolation.    The  commercial  and  industrial  interests,  and  par- 


732.  St.   Paul   Daily   Pioneer,   Jan.    16,    1875,    pp.   2,   c.   1;   "A   Railroad 
Commissioner's    Boast    and    Petition." 

733.  St.  Paul  Daily  Pioneer,  Jan.  16,   1875,  p.   2,  c.  3;   "Another  Opin- 
ion   upon    Commi.ssioner    Edgerton's    Contiscation    Speech." 

734.  Ibid.,  Feb.  26,  1875,  p.  2,  c.  1;  "The  People  and  the  Railroads." 


RAILROAD  LEGISLATION  IN  MINNESOTA. 


167 


tieularly  the  railroads,"^  were  the  first  to  suffer,  but  the  ef- 
fects of  the  jianic  were  soon  shared  by  the  farmer  as  well.  The 
grangers  had  looked  to  tlie  k^gislature  for  relief  from  railroad 
oppression,  and  the  granger  laws  had  been  enacted  for  their 
benefit.  The  railroads  now  complained  that  these  laws  were 
oppressive  and  confiscatory,  and  that  they  Avould  never  regain 
credit  wliile  such  laws  were  in  force.  Railroads,  "reduced  to 
penury  and  starvation"  and  compelled  by  law  to  serve  the 
public  at  rates  "far  below  cost,"  were  no  longer  oppressors, 
but  victims  of  oppression.  The  idea  became  more  and  more 
prevalent  that  something  must  be  done  to  help  the  prostrate 
railroads  and  to  restore  prosperity.  The  grangers  had  never 
planned  to  cripple  the  railroad  industry.  They  had  meant  to 
control  the  roads  for  the  public  interest.  Though  no  longer 
militant,  they  had  no  inclination  to  give  up  their  contention 
that  the  state  had  tlie  right  to  control  railroads.  Some  change 
in  policy  seemed  necessary,  but  many  were  reluctant  about  ac- 
cepting radical  changes. 

"When  the  legislature  met  in  January,  1875,  tlie  senatorial 
election  appeared  to  be  of  greater  interest  to  the  people  and 
to  the  legislators  than  railroad  legislation.  No  one  seemed  to 
have  very  definite  ideas  as  to  just  what  should  be  done,  and 
no  one  seemed  anxious  to  commit  himself  on  the  railroad  ciues- 
tion.'^^ 

The  governor  in  his  message  characterized  tlie  railroad  law 
of  1871  as  crude  in  its  conception,  harsh  towards  the  people  it 
intended  to  benefit,  and  unjust  to  the  weaker  railroads,  its  sole 
value  lying  in  the  fact  that  it  asserted  the  right  of  the  legisla- 
ture to  protect  the  people  against  excessive  rates  and  unjust 
discriminations,  and  that  it  had  been  upheld  by  the  courts. 
But  on  the  whole  he  favored  the  law  of  1874.  "Statutes,"  said 
he,  "are  generally  vindicated  or  condemned  by  their  results. 
The  statute  has  resulted  in  the  substantial  abolition  of  local 
discrimination. "  ^^^ 

The  railroad  commission  could  not  present  a  very  gratify- 


735.  The    Railroad    Gazette,    Sept.    27.     1873;    "The    Railroads    First 
Affected    by    the    Financial    Crisis." 

736.  St.   Paul    Daily   Dispatch,   Jan.    28,    1875;    "Where   are   the   Gran- 
gers?" 

737.  Minn.   Exec.   Docs.,    1874;   Governor's   Message. 


168  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

ing  report.  Two  railroad  companies  were  in  the  hands  of  re- 
eeivei-s,  three  liad  defaulted  in  interest  of  debts,  and  the  others 
had  maintained  their  credit  only  by  levying  assessments  on 
their  stockholders.^'^  They  had  interfered  as  little  with  the 
railroads  as  was  consistent  witii  the  prevention  and  correction 
of  abuses.  The  commission  believed  that  the  main  benefit  of 
the  law  was  that  it  at  an  early  stage  asserted  the  right  of  the 
state  "to  so  far  regulate  and  control  tliese  indispensable  and 
beneficent  agencies  of  material  and  social  development  as  to 
])rotect  the  people  from  evils  and  oppressions  that  are  felt  in 
older  communities,"  and  that  "the  certain  effect  Avill  be  to 
check  and  repress  the  growth  of  evils  that  have  scarcely  any 
present  existence  liere,  but  Avhich  the  experience  of  older  states 
demonstrates  are  sure  in  time  to  develop."'"" 

In  actual  operation  they  had  found  tlie  pro  rata  principle 
too  inflexible,  and  recommended  changes  looking  toward  flex- 
ibility, that  "the  rates  may  be  varied  to  equitably  adapt  them 
to  the  circumstances  affecting  cost  and  profit  of  service  on 
different  parts  of  the  same  road."'^" 

AVhen  the  railroad  question  finally  was  taken  up  for  discus- 
sion, little  enthusiasm  was  shown  one  way  or  another.  Mr. 
^Foi'se  of  Minneapolis  introduced  a  bill  in  the  House,  which 
substituted  a  single  advisory  commissioner  for  the  strong  rail- 
road commission  under  the  law  of  1874.  This  l)ill  was  favor- 
ably acted  upon  without  any  particular  discussion  in  the  com- 
mittee of  the  whole,  but  when  it  came  up  for  the  final  reading 
in  the  House,  Mr.  Brown,  who  opposed  the  bill,  protested  that 
it  was  being  rushed  through  without  due  consideration.  He 
admitted  that  a  reaction  had  taken  place  in  the  minds  of  the 
people,  making  them  more  favorable  to  the  railroads  than  be- 
fore, but  he  objected  to  creating  the  office  of  railroad  com- 
missioner with  merely  the  clerical  powers  of  gathering  sta- 
tistics and  reporting  to  the  governor.''*^  Mr.  Egan,  in  support 
of  the  bill,  tried  to  show  that  the  evils  to  be  remedied  were 
future  rather  than  present  evils,  as  indicated  in  the  railroad 
commissioner's  report,   and   therefore   he   thought  the   Morse 


738.  Minn.   Ttailroad  Commissioner's   Report,   1874,   p.    6. 

739.  Ibid.,  p.  !i. 

740.  Ibid.,   p.   8. 

741.  Record  and  Union,   March   6,    1S75;   "Tlie  Legislature." 


RAILROAD  LEGISLATION  IN  MINNESOTA.  160 

bill  sufficient  under  present  circumstances.  Mr.  Listoe,  another 
representative,  said  on  the  floor  of  the  House  that  some  farm- 
ers howled  for  railroads,  and  some  against  them.  His  people 
howled  for  them,  and  hence  he  would  encourage  tliem  ])y  vot- 
ing for  the  bill.'*- 

The  Morse  bill  passed  the  House  by  a  large  majority,  but 
met  with  greater  opposition  in  the  Senate.  The  Senate  com- 
mittee on  railroads  reported  against  a  repeal  of  the  existing 
law,'*^  but  later  a  joint  committee  on  railroads  agreed  to  re- 
port favorably  on  the  new  bill.'**  The  reports  of  the  Massa- 
chusetts railroad  commissioner,  ]Mr.  Adams,  seem  to  have  ex- 
erted a  considerable  influence  at  this  time.  I\rr.  Adams'  opin- 
ion was  that  "the  only  effective  restraint  upon  railroad  cor- 
porations, consistent  with  the  freedom  of  action  absolutely 
necessary  to  successful  management  of  their  complicated  busi- 
ness, is  the  moral  one  of  public  opinion.  *  *  *  He  says  in 
substance  that  experience  has  demonstrated  that  no  railroad 
company  will  persist  in  palpable  abuses  in  the  face  of  official 
exposure,  backed  as  it  is  sure  to  be  by  public  opinion.  "^*^ 
Arguments  of  this  nature  gave  the  bill  under  consideration  a 
strong  theoretical  justification.  It  was  not  to  be  considered  a 
mere  repeal  of  the  old  law,  but  rather  a  positive  measure  based 
on  good  sound  principles. 

The  bill  did  not  pass  the  Senate  without  a  struggle.  A 
number  of  the  Anti-]\Ionopolists  of  the  previous  year  rallied  to 
the  support  of  the  law  of  1874,  which  was  about  to  be  repealed. 
AVhile  they  did  not  favor  some  of  its  details,  they  were  in 
sympathy  with  the  principle  of  state  control  underlying  it. 
Senator  Coggswell,  one  of  their  number,  denied  that  the  law 
had  injured  the  railroads.  He  attributed  the  cessation  of  rail- 
road construction  to  want  of  capital  seeking  investment,  to  the 
absence  of  land  grants,  and  to  the  general  lack  of  confidence 
among  capitalists  in  railroads  and  business  management.'**"' 
Senator  Westfall  disowned  the  law  of  1874  as  the  offspring 


742.  Ibid. 

743.  St.  Paul  Daily  Dispatch,  Feb.  12,  1875,  p.  2,  c.  2;  "Tiie  Railroad 
Law." 

744.  St.  Paul  Daily  Press,   Feb.   26,    1875.   p.   2,   c.   1;    "Repeal   of  the 
Railroad  Law." 

745.  Ibid. 

746.  St.   Paul  Daily   Dispatch.   March   3,    1875.    p.   2. 


170  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

of  the  grange  luovciuent,  considering  it  merely  a  compromise 
measure.  He  i)roposed,  liowever,  "to  hold  and  stand  on  the 
ground  already  taken, — that  the  people  have  a  right  to  reg- 
ulate freights  and  tariffs."'*"  Si^nator  Donnelly  also  spoke 
vigorously  against  the  bill,  lie  had  voted  against  the  law  of 
1874  at  the  time  of  its  enactment,  but  he  "preferred  it  to  no 
law  at  all."'*^ 

Those  who  favored  tlie  l)ill  did  so  for  various  reasons.  Sen- 
ator Graves  "voted  for  the  bill  only  out  of  consideration  for 
the  impoverished  condition  of  the  railroads;""*^  Senator 
Doughty  because  there  was  nothing  to  the  bill  but  repeal."'^*' 
Senator  Knute  Nelson  favored  a  simple  repeal  instead  of  this 
"sugar-coated"  bill.  He  "preferred  to  take  his  medicine 
straight,  but  was  compelled  to  take  it  as  it  was  offered."  His 
constituency  were  anxious  to  secure  railroads  and  were  of  the 
opinion  that  the  existing  laAV  kept  capital  out  of  the  state. '^^^ 
There  M'as  little  enthusiasm  for  the  Morse  bill  as  a  positive 
measure.  It  passed  the  Senate  by  a  vote  of  twenty-eight  to 
thirteen,  and  was  approved  by  the  governor.'"'- 

The  new  law  '^"  provided  for  one  railroad  commissioner,  to 
be  elected  at  the  general  election  for  a  term  of  two  years.  He 
was  required  to  give  ten  thousand  dollar  bonds,  approved  by 
the  governor,  for  the  faithful  discharge  of  his  duties.''^*  His 
salary  was  fixed  at  three  thousand  dollars  a  year,  and  provi- 
sion v^'as  made  for  a  secretary  at  a  salary  of  twelve  hundred 
dollars.^^^ 

It  was  made  the  duty  of  the  commissioner  to  inquire  into 
the  neglect  or  violation  of  the  laws  by  the  railroad  companies 
or  by  their  employees  and  officers,  to  inspect  each  railroad  and 
its  equipment  Avith  special  reference  to  pul)lic  safety  and  con- 
venience, and  to  investigate  as  to  financial  condition  and  man- 


747. 

Rochester     Post,    March    6,    1875;    "Westfall 
Law." 

on     the     Railroad 

748. 

St.  Paul  Daily  Dispatch,  March   3,   1875,   p.  2, 

c.  4. 

749. 

Ibid.,   March   4,   1875,   p.   2;  Morse  Bill  passed, 

28   to  13. 

750. 

Ibid. 

751. 

Ibid. 

752. 

Ibid. 

753. 

General   Laws  of  Minn.,    1875,   ch.    103. 

754. 

Ibid.,   sec.   1. 

755. 

Ibid.,  sec.  2. 

RAILROAD  LEGISLATION  IN  MINNESOTA. 


171 


agemeiit. '■"''''  He  was  to  report  annually  to  the  governor,  and 
to  make  siu-li  suggestions  and  recommendations  as  he  deemed 
advisable."''  The  president  or  managing  officer  of  each  rail- 
road company  was  required  to  report  under  oath  to  the  rail- 
road commissioner  annually,  on  or  before  Octo])er  1.''®  The 
commissioner  was  empowered  to  investigate  books  and  i)apers, 
and  to  examine  officers  or  employees  under  oath  or  otherwise. 
He  was  given  power  to  issue  subpoenas  and  to  compel  obedi- 
ence in  these  matters,  in  the  same  manner  as  regular  courts  of 
law.  Wilful  obstruction  or  refusal  to  give  testimony  was  made 
a  misdemeanor  punishable  by  a  fine  of  not  over  one  thousand 
dollars. '^^ 

Eailroad  companies  were  prohibited  from  charging  one  per- 
son or  corporation  more  than  another  "for  a  like  service  from 
the  same  place,  and  ui)on  like  conditions  and  upon  similar  cir- 
cumstances;" and  all  concessions  of  rates,  drawbacks,  and 
contracts  for  special  rates,  were  to  be  "open  to  all  persons, 
companies,  and  corporations,  alike  under  similar  circumstan- 
ces."'"" Unreasonable  charges  for  any  privilege  or  service  on 
the  part  of  railroad  companies  was  likewise  prohibited.'^''^ 

It  was  made  the  duty  of  railroads,  "when  within  their 
power  to  do  so,  and  upon  reasonable  notice,"  to  furnish  suit- 
able cars  to  all  who  applied,  and  to  "receive  and  transport 
such  freight  with  all  reasonable  dispatch,"  and  to  provide 
"suitable  facilities  for  receiving  the  same  at  any  depot"  on 
their  lines. ""- 

Any  railroad  company  which  violated  the  provisions  of  this 
act,  as  to  "extortion  or  unjust  discrimination,"  was  to  forfeit 
treble  damages  and  costs  to  the  aggrieved  party.  The  railroad 
law  of  the  previous  year  was  repealed,  but  the  repeal  was  not 
to  affect  any  pending  action.'^"^ 

The  enactment  of  this  law  meant  a  definite  change  of  policy 


756. 

Ibid., 

sec. 

3. 

757. 

Ibid., 

sec. 

4. 

758. 

Ibid., 

sec. 

5. 

759. 

Ibid., 

sec. 

6. 

760. 

Ibid., 

sec. 

7. 

761. 

Ibid.. 

sec. 

8. 

762. 

Ibid., 

sec. 

9. 

763. 

Ibid., 

sec. 

10. 

172  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

in  regard  to  railroad  control.""*  The  railroad  coimuissioner 
was  given  plenary  powers  to  investigate  and  report,  but  had 
no  power  to  prevent  or  correct  abuses.  Unreasonable  charges, 
as  we  noted,  were  forbidden,  l)ut  were  in  no  way  defined. 
Discriminations  were  likewise  prohibited,  but  in  such  guarded 
terms  that  little  substantial  protection  was  afforded.  The  ag- 
grieved party  would  have  to  bring  civil  action  against  the 
railroad  company  and  prove  that  different  charges  had  been 
made  for  ''like  services  from  the  same  place  and  upon  like 
conditions  and  similar  circumstances,"  or  must  show  in  court 
that  the  charges  were  unreasonable,  or  that  cars  had  not  been 
furnished  upon  reasonable  notice,  when  it  was  in  the  power  of 
the  railroad  companies  to  do  so.  Discriminations  and  extor- 
tions were  no  longer  offences  against  the  state  and  punishable 
as  such.  They  were  again  placed  within  the  domain  of  private 
law,  and  the  individual  aggrieved  must  himself  bring  action, 
and  must  stand  the  cost  in  case  of  an  adverse  decision. 

The  legislature  also  passed  "An  act  for  the  protection  of 
exporters  of  grain  from  this  state."  '^"^  According  to  this  law, 
"common  carriers"  doing  business  within  the  state  and  en- 
gaged in  the  transportation  of  grain,  were  required  to  give  a 
receipt  for  the  amount  of  grain  received  and  were  bound  to 
deliver  the  same  amount  to  the  destination,  allowing  a  max- 
imum of  forty-five  pounds  loss  per  carload  during  transporta- 
tion. Refusal  to  give  such  a  receipt  when  demanded  made 
the  company  liable  to  a  fine  of  from  ten  to  fifty  dollars.  In 
case  of  refusal  or  neglect  to  deliver  the  amoimt  of  grain  so 
receipted,  the  common  carrier  was  made  liable  for  all  loss  be- 
yond the  legal  maximum,  and  was  subjected  to  a  fine  of  fifty 
to  one  hundred  dollars  for  each  offence.  All  ])rosecutions  un- 
der this  act  were  to  be  made  in  the  name  of  the  state,  under 
the  direction  of  the  attorney  general.'"" 

The  purpose  of  this  law  was  to  remedy  the  "shortage  and 
stealage"  abuse  against  which  the  farmers  and  independent 
shippers  had  so  long  contended.  The  railroads  were  here  called 
common   carriers   and   the   legislature   undertook   to   regulate 

764.  See    the    Railroad    Gazette,    March    13,    1875,    p.    109,    "Minnesota 
Railroad  Laws;"  The  Nation,   vol.   20,   p.   1S3. 

765.  General  Laws  of  Minn.,   1875,  ch,   88. 

766.  Ibid.,  sec.   3. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  173 

them  in  their  trausportation  of  grain.  The  penalties  under 
the  law  were  not  severe,  but  the  manner  of  enforcing  them  was 
in  striking  contrast  with  the  weak  provisions  of  tlie  act  cal- 
culated to  prevent  discriminations  and  extortions. 

These  were  the  important  general  laws  passed  at  this  ses- 
sion. Numerous  special  laws  were  passed  authorizing  cities, 
counties  and  towns  to  issue  bonds  in  aid  of  railroads.'"'  This 
shows  that  the  people  in  different  parts  of  the  state  were 
anxious  to  see  railroad  construction  resumed.  A  number  of 
special  laws  were  passed  by  the  legislature  to  aid  railroads. 
Two  railroads  were  given  state  swamp  lands.'"^  The  St.  Paul 
and  Pacific  railroad  company  had  its  time  limit  for  completion 
extended,  but  was  bound  to  charge  only  just  and  reasonable 
rates  and  to  make  no  unjust  and  unreasonable  discrimina- 
tions.'"^ The  ^Minneapolis  and  St.  Louis  railroad  company  was 
authorized  to  extend  a  branch  line,  and  its  charter  rights  were 
made  applicable  to  this  branch,  provided  passengers  and  freight 
were  carried  over  the  lines,  "at  such  equitable  and  reasonable 
rates  as  may  from  time  to  time  be  fixed  by  law."''°  These 
acts  are  a  reversion  to  the  previous  type  of  railroad  regulation. 
Direct  legislative  control  of  railroad  rates,  as  contemplated  by 
the  granger  laws,  had  been  given  up  as  inexpedient,  but  the 
legislature  promptly  resumed  the  plan  of  regulation  by  special 
law  wherever  possible. 

The  granger  legislature  of  187-4  had  passed  laws  to  control 
railroad  rates  and  railroad  management,  but,  as  we  have  seen, 
they  also  memorialized  Congress  for  river  improvements  and 
canals,  in  order  to  bring  a  clieaper  means  of  transportation  into 
competition  with  the  railroads.  The  legislature  of  1875,  which 
repealed  the  granger  laws  and  by  joint  resolution  directed  the 
attorney  general  to  discontinue  the  suit  pending  by  express 
order  of  the  preceding  legislature  against  a  railroad  company 
to  have  its  charter  declared  forfeited,"^  continued  the  agita- 


767.  Special  Laws  of  Minn.,  1S75,  chs.  126,  127,  129,  130,  131,  132. 

768.  Ibid.,  chs.  51  and  54,  the  Taylor's  Falls  and  Lake  Superior  and 
the  Duluth  and  Iron  Range  railroad  companies,  resp. 

769.  Ibid.,   ch.   49. 

770.  Ibid.,  ch.   63.     Other  special  acts  were  chs.   50,   52,   57,  58,   64. 

771.  General  Laws  of  Minn.,  1875,  p.  218;  Joint  Resolution  No.  19. 
Suit  had  been  brought  against  the  First  Division  of  the  St. 
Paul  and   Pacific  railroad  company. 


174  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

tion  for  extended  and  improved  water  transportation.  By- 
joint  resolution  Congress  was  requested,  verbatim  as  in  1874, 
to  make  a  survey  of  the  "water  routes  between  the  navigable 
waters  of  the  ]\Iinnesota  river  and  the  Red  river  of  the  North," 
to  ascertain  the  feasibility  of  a  canal  connection  between  the 
two.  Surveys  had  been  made  of  the  two  rivers  and  measures 
were  progressing  for  improving  the  navigation  on  the  rivers, 
it  is  stated  in  the  resolution,  but  the  surveys  were  not  being 
made  witli  the  idea  of  connecting  tlie  rivers  and  making  them 
a  continuous  navigation  system. '^'- 

C'ongress  was  in  like  manner  "requested"  to  survey  the 
Red  or  Otter  Tail  river  to  ascertain  the  feasibility  of  improv- 
ing that  river  from  Fergus  Falls  upward  to  where  the  North- 
ern Pacific  crossed  it  near  Perham."'"'  The  senators  and  repre- 
sentatives of  the  state  in  Congress  were  urged  to  use  their  in- 
fluence to  secure  the  improvement  of  the  Red  river  between 
Breckenridge  and  ]\lanitoba,''^  of  the  Mississippi  river  at  St. 
Paul,"''  and  of  the  ^Minnesota  river. ' ''^  It  was  believed  that 
navigable  streams  and  canals  under  the  control  of  the  federal 
government  would  forever  remain  in  competition  with  rail- 
roads and  tend  to  keep  down  their  rates. 

Tlie  ]\Iinneapolis  and  St.  Paul  papers  quite  generally  en- 
dorsed the  new  railroad  law.  The  St.  Paul  Dispatch  had  advo- 
cated the  Morse  bill  from  the  time  it  was  introduced.'""  The 
St.  Paul  Pioneer  heartily  commended  it,  and  congratulated  the 
state  upon  its  passage;  for,  "While  the  new^  measure  in  no 
respect  abates  the  principle  of  state  control,  it  substitutes  for 
the  heavy  hand  of  iron-clad  tariffs  a  system  which  will  accom- 
plish every  just  reform  and  at  the  same  time  secure  capital 
against  the  arbitrary  persecution  which  has  resulted  in  blight- 
ing railroad  interests  all  over  the  AVest.  By  the  new  bill  the 
interests  of  the  people  are  amply  guarded,  while  those  of  the 


772.  Ibid.,  p.  213;  Joint  Resolution  No.  10. 

773.  Ibid.,  p.  207;  Joint  Resolution  No.  1. 

774.  Ibid.,   p.   208;   Joint   Resolution  No.   2. 

775.  Ibid.,  p.   210;   Joint   Resolution  No.   5. 

776.  Ibid.,   p.   210;   Joint  Resolution  No.   6. 

777.  St.  Paul  Daily  Dispatch,  Feb.  23,  1875,  p.  2,  c.  1,  "A  Sensible 
Bill;"  Feb.  26,  1875,  p.  2,  c.  1,  "The  Pending  Railroad  Bill;" 
March  1,  1875,  p.  2,  c.  1,  "A  Political  Movement;"  March  2. 
1875,  p.  2,  c.  1,  "The  New  Railroad  Law." 


RAILROAD  LEGISLATION  IN  MINNESOTA.  175 

railroads  are  secured  against  violent  and  communistic  confis- 
cation." ^^« 

The  Minneapolis  Tribune  said:  "The  Morse  bill  virtually 
restores  to  the  railroad  companies  the  right  to  manage  and 
control  their  own  proi:)erty,  which  right  was  taken  away  from 
them  last  winter.  *  *  *  Thus  has  our  state  at  last  taken 
a  step  calculated  in  the  end  to  repair  the  injury  inflicted  upon 
her  by  tlie  senseless  railroad  war.  ""^ 

The  press  outside  the  TAvin  Cities  was  not  so  unanimous  in 
its  approval.  The  Grange  Advance  said:  "A  number  of  our 
exchanges  are  amusing  themselves  by  miscellaneously  pitching 
into  the  new  railroad  law.  *  *  *  While  we  do  not  think 
it  perfect,  we  cannot  agree  with  the  broad  assertions  that  are 
being  constantly  paraded  before  the  public  in  the  following 
style:  The  ]\Iinnesota  legislature  at  its  recent  session  virtually 
sold  out  to  the  railroads  and  repealed  all  the  legislation  of 
1874,  and  left  the  people  at  the  mercy  of  the  corporations."  ^^° 

The  Owatonna  Journal  was  one  of  the  papers  here  referred 
to.  It  came  out  strongly  against  the  bill  and  "asserted  un- 
hesitatingly that  all  the  railroad  lawyers  this  side  of  perdition 
could  not  have  framed  a  clause  to  expressly  grant  the  right  of 
discrimination  in  better  terms  or  more  effectively. " '^^^  Ex- 
governor  Austin  wrote  to  the  Journal  a  letter  commending  it 
on  its  attitude  and  characterizing  the  repeal  of  the  law  of  1874, 
without  enacting  a  better  substitute,  as  a  "criminal  i:)iece  of 
stupidity  and  folly."  He  predicted  an  early  repeal  of  the 
"Morse  fraud.""-  The  Monticello  Times  agreed  with  Mr. 
Austin  tliat  the  law  of  1874  had  not  been  given  a  fair  trial. '^^^ 

The  Rochester  Post  considered  tlie  enactment  of  the  law  an 
"acknowledgment  by  the  legislature  that  the  attempt  to  fix 
rates  of  compensation  for  transi)ortation  services  by  a  differ- 
ent system  from  that  by  which  other  values  are  fixed  has 
proved  a  failure. ' '  "*     Its  tone  is  quite  moderate  considering 


778.  St.    Paul    Daily    Tioneer,    March    4,    1S7.5,    p.    2,    c.    1,    "The    New 

Railroad   Bill." 

77fl.  Minneapolis  Daily  Tribune,  March   5,   1S7.'),   p.  2,  c.   1. 

780.  Grange  Advance,  March  2,   1875. 

781.  Owatonna   Journal,   March   4,    187.5. 

782.  Ibid.,  March  25,  1875. 

783.  Anti-Monopoli.st,  Apr.  15,   1875. 

784.  Rochester  Po.st. 


176  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

its  previous  stand.  The  Windom  Reporter  called  the  railroad 
law  a  farce,  and  continued:  "Common  law  guarantees  as 
much  protection,  and  the  penalties  of  tlie  new  law  will  have 
no  effect  in  frightening  the  railroads  to  adopt  a  reasonable 
tariff."  ^^''^  The  Winona  Repul)lican  said:  "The  bill  prac- 
tically amounts  to  a  total  surrender  on  tlie  part  of  the  state 
of  the  right  to  regulate  railroads  *  *  *  it  would  be  better 
to  have  no  railroad  law  at  all  and  save  the  useless  clerk 
hire.""« 

The  Anti-Monopolist  perhaps  came  out  the  very  strongest 
against  the  repeal  of  the  former  law.  It  called  the  new  hnv  a 
"sham,  a  mockery,  a  delusion,  and  a  snare. "^^"  It  quoted  the 
Chisago  County  Post  as  saying:  "The  new  railroad  law  is  not 
well  thought  of  by  the  state  press;  in  fact,  there  are  few  papers 
in  the  state  that  do  not  denounce  the  law  as  a  sham  conveying 
no  meaning  whatever, ' '  ^^^  This  last  statement  is  too  sweep- 
ing, but  enough  quotations  have  been  given  to  show  that  the 
new  law  was  not  favorably  received  by  all.  There  were  many 
throughout  the  state  who  were  disappointed  because  the  gran- 
ger law  of  1874  was  not  given  a  longer  trial. 

CHAPTER  XVI. 

THE   SIGNIFICANCE   OF  THE  GRANGER   MOVEMENT. 

The  repeal  of  the  granger  laws  in  ^linnesota  and  the  neigh- 
boring granger  states,  following  the  sudden  decline  in  granger 
activity,  was  taken  by  many  as  an  indication  that  the  granger 
movement  had  spent  its  force  and  accomplished  nothing.  But 
such  was  hardly  the  case.  The  grangers  did  not  succeed  in 
solving  the  railroad  problem,  but  as  a  direct  result  of  their 
revolt  against  the  railroad  abuses  of  their  day  the  fact  came 
to  be  generally  recognized  that  the  people  as  well  as  the  rail- 
road corporations  have  "vested  rights,"  and  this  was  no  mean 
contribution  toward  its  solution. 

785.  Anti-Monopolist,  March  18,  1875,  "The  Railroad  Law;"  Win- 
dom Rejiorter  quoted. 

78G.  Ibid.,  March  11,  1875,  "The  New  Railroad  Law;"  The  Winona 
Republican  quoted. 

787.  Ibid.,   March   18,   1875. 

788.  Ibid.,   March   25,   1875. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  177 

"Whenever  attempts  were  made  to  subject  the  railroads  to 
regulation  in  the  interest  of  the  people,  they  sought  refuge 
behind  the  Dartmouth  College  decision.  In  tliis  case  the 
United  States  supreme  court  had  held  that  the  original  charter 
of  Dartmouth  College  constituted  a  contract  between  the 
Crown  and  the  trustees  of  the  college,  which  was  not  dissolved 
hy  the  Revolution,  and  that  an  act  passed  by  the  state  legis- 
lature of  New  Hampshire  altering  this  charter  Avithout  the 
consent  of  the  corporation  impaired  the  obligation  of  the  con- 
tract and  was  therefore  null  and  void.'*^  All  rights  once 
legally  vested  in  corporations  were  thus  placed  beyond  the 
reach  of  subsequent  state  legislation.  "This  decision,"  said 
Chancellor  Kent  approvingly,  "did  more  than  any  other  sin- 
gle act  proceeding  from  the  authority  of  the  United  States  to 
throw  an  impregnable  barrier  around  all  rights  and  franchises 
derived  from  the  government ;  to  give  solidity  and  inviolability 
to  the  literary,  charitable,  religious  and  commercial  interests 
of  the  country. "  ^^^  This  statement,  made  in  1826,  seems  al- 
most prophetic  in  the  light  of  later  developments.  The  growth 
of  corporate  enterprise  and  the  part  this  decision  was  to  play 
could  not  be  foreseen,  even  by  such  far-sighted  men  as  jNIar- 
shall  and  Kent.  The  doctrine  laid  down  in  this  decision  was 
followed  in  later  eases  in  federal  and  state  courts,  and  it  soon 
came  to  be  regarded  as  a  settled  principle  of  American  consti- 
tutional laAv  that  charters  of  private  corporations  were  invio- 
lable contracts  between  the  legislature  and  the  corporators,  and 
that  the  subsequent  power  of  the  legislature  was  restrained  by 
their  terms.^^^ 

This  decision  did  not  lead  to  an  amendment  of  the  federal 
constitution  calling  for  a  different  interpretation  of  the  provi- 
sion in  question,  as  did  the  decision  in  Chisholm  vs.  Georgia  ;'^- 
but  the  different  states  began  almost  immediately  to  guard 
against  the  interpretation  of  future  charters  as  inviolable  con- 
tracts by  expressly  reserving  to  the  state  legislature  the  right 


rS9.  The  Trustees  of  Dartmouth  CoUege  vs.  Woodward,  4  Wheaton, 
518;  decided   1819. 

r90.     1   Kent's  Com.,   392;   First  edition,   1826. 

r91.     See   94   U.   S.,    185,   Stone   vs.    Wisconsin,   dissenting   opinion. 

r92.  2  DaUas,  419;  decided  1793.  The  eleventh  amendment  was  pro- 
posed in   1794. 


178  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

to  alter,  amend,  or  repeal  acts  incorporating  private  corpora- 
tions/®^ The  first  plan  was  to  insert  a  provision  to  this  effect 
in  the  charter  when  granted,^®*  and  soon  became  quite  general. 
Another  plan  was  to  make  the  reservation  of  legislative  power 
of  amendment  or  repeal  applicable  by  general  law  to  all  fu- 
ture charters.'^®^  A  third  plan  was  to  insert  this  reservation 
of  power  in  the  state  constitution.  Beginning  with  tlie  Dela- 
ware constitution  -as  amended  by  a  constitutional  convention 
in  1831,  we  find  that  by  1866  this  provision  is  to  be  found  in 
the  constitution  of  at  least  fifteen  different  states.'^''® 

From  the  great  amount  of  legislation  and  constitutional 
enactment  which  it  provoked,  it  is  evident  that  the  doctrine 
promulgated  in  the  Dartmouth  College  decision  was  regarded 
as  new  and  not  altogether  acceptable  by  the  different  states. 
And  as  time  went  on  and  railroads  were  built  and  railroad  cor- 
porations grew  in  power,  the  situation  became  more  and  more 
serious;  for  the  new  corporations,  though  controlling  an  essen- 
tial factor  in  the  economic  life  of  the  country,  claimed  exemp- 
tion from  state  regulation  in  the  interests  of  the  public  they 
were  serving  as  common  carriers,  because  their  charter  rights 
were  constitutionally  beyond  legislative  interference.  Even 
where  reservation  had  been  made  that  charters  might  be  al- 
tered or  repealed,  it  was  a  matter  of  grave  doubt  in  some  c[uar- 
ters  whether,  after  all,  this  reservation  was  not  an  empty  for- 
mula.'^^     If    a    company  had  vested  rights  in  the  franchises 


793.  10  Barbour,  260,  New  York  Supreme  Court,  1851;  Amer.  Law 
Review,  vol  VIII,  p.  189  (Jan.,  1874),  "The  Dartmouth  CoUege 
Case." 

794.  For  instance,  Laws  of  New  York,  1819,  ch.  110,  sec.  3;  Laws  of 
New  Hampshire,  1820,  ch.  34,  sec.  10.  The  provision  may  be 
found    later   in    charters   of   most    of    the   states. 

795.  1  New  York  Revised  Statutes  (1829),  600,  sec.  8,— this  provision 
dates  from  Dec,  1827;  Session  Laws  of  Mass.,  1830,  ch.  81;  3 
Public  Laws  of  Maine,   ch.   503,   approved   March    17,    1831. 

796.  Del.,  Const,  of  1831,  art.  2,  sec.   17. 

N.  Y.,  1846,  art.  8,  sec.   1.       Penn.,  amend.,  1857,  art.   1,  sec.  26. 

Wis.,  1848,  art.  11,  sec.   1.      Kan.,   1859,  art.  12,  sec.  1. 

Cal.,   1849,  art.  4,  sec.  31.        W.  Ya.,  1861,  art.   11,  sec.  5. 

Mich.,   1850,  art.   15,  sec.   1.    Nev.,   1864,  art.  8,  sec.  1. 

Ohio,  1851,  art.  13,  sec.  2.      Md.,  1864,  art.  3,  sec.  51. 

Ore..   1857,  art.   11,   sec.   2.      Mo.,   1865,  art.   8,  sec.  4. 

fowa,    1857,   art.   8,   sec.   2.     Tex.,   1866,  art.  7,  sec.   31. 

797.  1  Amer.  Law  Rev.,  451,  456,  ff.  (Apr.,  1867);  "Legislative  Con- 
trol  over  Railway  Charters." 


RAILROAD  LEGISLATION  IN  MINNESOTA.  179 

granted,  to  Avhat  extent  would  the  legislature  be  authorized  to 
interfere  materially  with  these  property  rights?  And  the 
United  States  supreme  court  later  did  decide  that  the  reserved 
power  of  alteration  and  amendment  was  not  without  limit,  but 
that  "the  alterations  must  be  reasonable,  they  must  be  made 
in  good  faith,  and  be  consistent  with  the  scope  and  object  of 
the  act  of  incorporation."  "^'^ 

The  right  of  the  legislature  to  control  its  own  creatures, 
the  corporations,  was  at  the  time  of  the  granger  movement  no 
longer  an  academic  question  of  political  and  legal  theory;  it 
was  a  vital  question  in  the  economic  life  of  the  country,  and  it 
had  to  be  faced  squarely.  Thomas  ^\.  Cooley,  the  eminent 
jurist,  expressed  his  opinion  of  tlie  situation  in  1873  as  follows: 
"It  is  under  the  protection  of  the  decision  in  the  Dartmouth 
College  case  that  the  most  enormous  and  threatening  powers 
in  our  country  have  been  created ;  some  of  the  great  and 
wealthy  corporations  actually  having  greater  influence  in  the 
country  at  large,  and  upon  the  legislation  of  the  country,  than 
the  States  to  which  they  owe  their  corporate  existence.  Every 
privilege  granted  or  right  conferred — no  matter  by  what  means 
or  on  what  pretence — being  made  inviolable  by  the  Constitu- 
tion, the  government  is  frequently  found  stripped  of  its  au- 
thority in  very  important  particulars  by  unwise,  careless,  or 
corrupt  legislation;  and  a  clause  of  the  Federal  Constitution, 
whose  purpose  was  to  preclude  the  repudiation  of  debts  and 
just  contracts,  protects  and  perpetuates  the  evil."''^" 

In  an  address  in  1873  James  A.  Garfield  criticised  the  judi- 
cial application  of  the  Dartmouth  College  case,  and  ventured 
the  opinion  that  some  feature  of  that  opinion  as  applied  to  the 
railway  and  similar  corporations  must  give  way  under  the  new 
elements  which  time  had  added  to  the  problem,  and  said  fur- 
ther: "It  will  be  a  disgrace  to  our  age  and  to  us  if  we  do  not 
discover  some  method  by  which  the  public  functions  of  these 
organizations  mav  be  brought  into  full  subordination,  and  that 


r98.     95   U.    S.,    319,    324;    Shields   vs.   Ohio. 

■99.  Cooley,  Constitutional  Limitations,  Third  ed.,  1874  (preface 
dated  Dec,  1873),  pp.  279,  280  note.  This  statement  is  not 
found  in  the  first  edition,  published  in  1867,  before  the  granger 
movement  had  brought  the  question   into  prominence. 


180  MINNESOTA    HISTORICAL   SOCIETY    COLLECTIONS. 

too  without  violence  and  without  unjust  interference  with  the 
rights  of  private  individuals. ' '  '*"" 

Railroads  had  from  their  first  appearance  been  considered 
common  carriers,  both  in  England  and  in  the  United  States  ;^°^ 
and,  this  being  the  case,  many  failed  to  see  why  railroads 
siiould  not,  like  other  common  carriers,  be  subject  to  legis- 
lative regulation.  That  railroads,  though  constructed  by  pri- 
vate corporations  and  owned  by  them,  were  public  highways, 
had  been  the  doctrine  of  nearly  all  the  courts  since  the  ear- 
liest days  of  railroad  construction.^"-  Because  they  were  pub- 
lic highways  for  the  public  benefit,  the  right  of  eminent  do- 
main had  always  been  given  to  them  ;^"'  and  courts  had  fre- 
quently held  that  the  public  had  an  interest  in  such  roads, 
whether  they  were  owned  and  operated  by  a  private  corpora- 
tion or  not.*"*  Because  railroads  performed  public  duties  and 
functions  and  were  indispensable  to  the  public  interests,  the 
state  legislature  could  rightfully  tax  or  authorize  taxation  for 
the  purpose  of  aiding  railroads.-"''  The  United  States  supreme 
court  in  1872  expressed  this  doctrine  in  the  following  words: 
"A  railroad  built  by  a  state  no  one  claims  w^ould  be  anything 
else  than  a  public  highway,  justifying  taxation  for  its  con- 
struction and  maintenance,  though  it  could  be  no  more  open 
to  public  use  than  is  a  road  built  and  owned  by  a  corporation. 
Yet  it  is  the  purpose  and  the  uses  of  a  work  which  determine 
its  character."  ^^^ 

The  railroads  reaped  all  the  benefits  of  their  quasi-public 
character,  but  in  the  matter  of  business  management  they 
claimed  to  be  private  corporations  subject  only  to  such  provi- 
sions as  were  to  be  found  in  their  charters.  The  railroads  may 
have  had  some  reason  to  fear  the  legislatures  of  the  time.    On 


800.  James   A.    Garfield,    "The    Future    of   the    Republic,    its    Dangers 
and  its  Hopes;"  5  Legal  Gazette   (Phila.),  408-9,  Dec.  19,   1873. 

801.  See   Redfield   on   Carriers  and   other   Bailees    (Cambridge,   1869), 
ch.  3,  "Railroads  Common  Carriers,"  and  cases  there  cited. 

802.  Alcott  vs.  The  Supervisors,   16  Wall.,   678. 

803.  Sharpless   vs.    The   Mayor   of   Philadelphia,    21    Penn.    State    Re- 
ports,  147,   169-170;   decided   1853. 

804.  Ibid.,   169;  2  Mich.,  427;   18  Minn.,  482;  56  111.,   377-379;  see  also 
3  Wall.,  654,  663,  and  cases  there  cited. 

805.  21  Penn.  State  Reports,  147;  2  Mich.,  427;  3  Wall.,  654;  for  argu- 
ments contra,  see   20  Mich.,  462. 

806.  Alcott   vs.  The  Supervisors,   16   Wall..   678,   696. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  181 

the  other  hand,  the  i)eoi)le  had  grievances  against  the  rail- 
roads, some  imaginary  and  unfounded,  perhaps,  but  many  were 
very  real  and  substantial,  and  particularly  in  the  western 
states  the  people  were  in  no  mood  to  permit  court  decisions 
of  the  past  to  stand  in  tlie  way  of  redressing  existing  wrongs. 
Lawyers  who  had  not  forgotten  the  Dartmouth  College  deci- 
sion began  in  some  places  to  find  themselves  ineligible  to  the 
elective  judiciary.- -'  The  courts  had  always  in  the  past  been 
ready  to  protect  the  corporations  in  their  chartered  rights,  but 
the  people  now  began  to  demand  that  the  courts  should  be 
equally  ready  to  insist  that  they  perform  faithfully  to  the  pub- 
lic those  duties  which  were  the  objects  of  their  chartered 
powers.*"^ 

The  granger  movement  was  an  attempt  on  the  part  of  the 
people  to  secure  control  over  railroad  corporations  and  to  pre- 
vent extortionate  and  discriminating  rates  by  legislation, 
which,  according  to  the  usually  accepted  understanding  of  the 
Dartmouth  College  decision,  would  be  unconstitutional.  The 
granger  states  were  those  whose  legislatures  enacted  such  laws 
and  provided  means  for  their  enforcement.  Cases  involving 
the  constitutional  rights  of  state  legislatures  to  regulate  rail- 
road rates  soon  came  before  the  United  States  supreme  court 
from  three  of  the  four  granger  states,  namely,  Iowa,  AViscon- 
sin,  and  Minnesota. *''"  The  railroads  contended  that  state  laws 
fixing  maximum  rates,  or  authorizing  railroad  commissions  to 
do  so,  Avere  unconstitutional,  because  they  impaired  the  obliga- 
tion of  the  charter  contract,  because  they  virtually  deprived 
the  corporations  of  property  without  due  process  of  laAv,  and, 
finally,  because  such  laws  were  a  regulation  of  inter-state  com- 
merce over  which  Congress  had  lieen  given  exclusive  jurisdic- 
tion.^^" The  constitution  of  the  state  of  Wisconsin  reserved 
to  the  legislature  tlie  right  to  amend  or  repeal  charters.''^^  The 
railroad  corporations  here  argued  that  this  reservation  clause 
must  be  construed  in  connection  Avith  the  fourteenth  amend- 


so?.     Martin.  History  of  the  Grange  Movement   (1873),  p.  335. 

808.  See  56  IH.,   365.   379. 

809.  From    Iowa,    94    U.   S..    155;    from    Wisconsin,    94    U.    S.,    164,    179. 
and    181;   from  Minnesota,   94  U.   S.,   180  and   181,   note. 

810.  The    Chicago,    Burlington    and    Quincy    Railroad    Company    vs. 
Iowa,  94  U.  S.,  155,  158,  ff. 

811.  Const,  of  Wis.,  Art.   11,  sec.    1. 


182  MINNESOTA  HISTORICAL   SOCIETY    COLLECTIONS. 

meiit  of  the  federal  constitution,  for  the  right  to  a  reasonable 
compensation  for  their  services  was  not  a  franchise  or  privi- 
lege granted  by  the  state,  but  an  inherent  right  which  could 
not  be  abridged  or  impaired  by  the  state, — the  question  of  rea- 
sonableness was  not  for  legislative  ])ut  for  judicial  dctcrinina- 
tion.s'- 

Tlie  supreme  court,  however,  followed  the  decision  it  had 
just  rendered  in  the  case  of  ]\Iunn  vs.  lUinois.**^^  In  this  case 
it  had  held  constitutional  an  Illinois  statute  which  fixed  the 
maximum  charges  for  the  storage  of  grain  in  warehouses  at 
Chicago  and  other  places  in  the  state  having  not  less  than 
one  hundred  thousand  inhabitants.  The  court  asserted  that, 
under  the  powers  inherent  in  every  sovereignty,  a  government 
may  regulate  the  conduct  of  its  citizens  toward  each  other,  and, 
when  necessary  for  the  public  good,  the  manner  in  Avhich  each 
shall  use  his  property;  when  the  owner  of  property  devotes  it 
to  a  use  in  which  the  i)ublic  has  an  interest,  he  in  eflPect  grants 
to  the  public  an  interest  in  such  use,  and  must,  to  the  extent 
of  such  interest,  submit  to  be  controlled  by  the  public  for  the 
common  good  as  long  as  he  uuiintains  the  use ;  of  the  propriety 
of  legislative  interference  within  the  scope  of  legislative  power, 
the  legislature  is  the  exclusive  judge. ^'^^ 

In  applying  the  principle  of  this  decision  in  the  railroad 
cases  the  court  disappointed  the  railroads,  for  they  had  relied 
on  the  Dartmouth  College  decision  as  a  precedent.  It  had  l)een 
SO  long  judicially  declared  that  it  was  supposed  to  be  no  longer 
open  to  discussion,  that  charters  of  private  corporations  were 
inviolable  contracts,  protected  by  constitutional  guarantees 
against  legislative  interference. ^^^  The  decisions  in  the  gran- 
ger cases  did  not  overrule  the  Dartmoutli  College  decision,  but 
they  did  assert  the  general  principle  that  a  legislature  has  a 
right  to  regulate  the  compensation  for  the  use  of  all  property 
and  for  services  in  connection  with  it,  the  use  of  which  affects 
the  community  at  large,  even  though  the  charter  of  a  company 
confers  upon  it  the  right  to  charge  reasonable  rates.*'®     The 


812.  Peck   vs.   Railroad   Company,    94   U.   S.,    164,    167. 

813.  94  U.  S.,   113;   decided   1876. 

814.  Ibid.,  see  summar>-. 

815.  See   Stone   vs.    Wisconsin,    94   U.   S.,    185,   dissentiny   opinion. 

816.  Ibid.,  186. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  183 

railroads  could  no  longer  seek  refuge  behind  the  "impregna- 
ble barrier  thrown  around  all  rights  and  franchises  derived 
from  the  government"  by  the  Dartmouth  College  decision. ^''^ 
As  public  highways  and  common  carriers,  they  were  held  sub- 
ject to  state  regulation,  and  thus  were  "practically  placed  at 
the  mercy  of  the  legislature  of  every  state.  "^^^ 

Later  decisions  have  modified  to  some  extent  the  principles 
laid  down  in  the  granger  cases,  and  afiford  the  railroads  ample 
protection  by  a  liberal  interpretation  of  the  fourteenth  amend- 
ment, which  makes  the  federal  judiciary  the  final  judge  as  to 
the  reasonableness  of  rates  prescribed  according  to  state  law.®'^ 
But  since  the  granger  movement  in  the  early  seventies  and  the 
decisions  handed  doAvn  by  the  federal  supi'eme  court  in  the 
granger  cases  in  1876,  the  railroad  corporations  have  not  laid 
claim  to  vested  rights  beyond  reasonable  legislative  control. 

BIBLIOGRAPHY. 

The  following  publications  have  been  examined  in  the  prep- 
aration of  this  thesis,  many  of  them  being  cited  in  its  foot- 
notes. 

Acts,  Joint  Resolutions  and  Memorials  passed  by  the  First  Leg- 
islative Assembly  of  the  Territory  of  Minnesota,  1849.  Republication 
of  Important  General  Laws  of  Wisconsin  now  in  force  in  the  Terri- 
tory of  Minnesota,  by  Provision  of  the  Organic  Act,  1849.  (These  are 
published  together,  and  the  chapters  are  numbered  consecutively 
throughout  the  volume.) 

Session  Laws  of  the  Territory  of  Minnesota,  1850-1857.  (Pub- 
lished annually;  extra  session  in  1857.) 

Collated  Statutes  of  the  Territory  of  Minnesota  and  Decisions  of 
the  Supreme  Court;  collated  pursuant  to  a  Resolution  of  March  5, 
1853.     St.  Paul,  1853. 

Public  Statutes  of  the  State  of  Minnesota,  1849-58. 

General  and  Special  Laws  of  Minnesota,  1858-1875.  (Annual  ses- 
sions; no  session  in  1859;  extra  session  in  1862.) 

The  General  Statutes  of  the  State  of  Minnesota,  1866. 


817.  1   Kent's  Com.,    392,   first   edition. 

818.  94  U.  S.,  185.  See  C.  F.  Adams,  Railroads,  their  Origin  and 
Problems,   pp.   127,    129,    147. 

819.  Chicago,  Milwaukee  and  St.  Paul  Railroad  Company  vs.  Minne- 
sota, 134  U.  S.,  418,  decided  March  24,  1890;  see  dissent  by  Jus- 
tice Bradley,  p.  461,  ff.  Reagan  vs.  Farmers'  Loan  and  Trust 
Company,  154  U.  S.,  362.     Smyth  vs.  Ames,  169  U.  S.,  466. 


184  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

An  Analytical  Index  to  the  General  and  Special  Laws  of  ttie  Ter- 
ritory and  State  of  Minnesota  from  1849  to  1875.  By  John  C.  Siiaw 
and  John  B.  West.     St.  Paul,  1876. 

.Journals  of  the  Council  and  of  the  House  of  Representatives  of 
the  Territory  of  Minnesota.  (The  Legislative  Assembly  met  annually 
from  1849  to  1857,  with  an  extra  session  in  1857.  The  Governors'  Mes- 
sages are  found  in  these  Journals.) 

Journals  of  the  Senate  and  of  the  House  of  Representatives  of 
the  State  of  Minnesota,  from  1858  to  1875.     No  session  in  1859. 

Debates  and  Proceedings  of  the  Minnesota  Constitutional  Conven- 
tion; Officially  Reported  by  Francis  H.  Smith.  [Democratic.*]  St. 
Paul,  1857. 

Debates  and  Proceedings  of  the  Constitutional  Convention  for  the 
Territory  of  Minnesota;  T.  F.  Andrf:\vs,  Official  Reporter  to  the  Con- 
vention.    [Republican.*]     St.  Paul,  1858. 

Minnesota  Executive  Documents,  1860-1875.  (These  contain  the 
governors'   messages,   auditors'   reports,   treasurers'   reports,   etc.) 

Reports  of  the  Railroad  Commissioner  for  the  years  1871  to  1873, 
inclusive;   annual. 

Report  of  the  Railroad  Commissioners  for  the  year  1874.  (Under 
the  law  of  1874  a  board  of  three  commissioners  was  appointed,  and 
served  until  the  repeal  of  this  law  the  following  year.  From  1875  to 
1884,  inclusive,  a  single  railroad  commissioner  served  and  presented 
annual  reports.  The  present  Railroad  and  Warehouse  Commission 
dates  from  1885.) 

Reports  of  Railroad  Commissions  or  Commissioners  of  other  states, 
particularly   of  Massachusetts,   Ohio,   Illinois,   and   Wisconsin. 

Annual  Reports  of  the  Secretary  of  the  Board  of  Agriculture  [of 
Massachusetts].     Boston;    1854,  and  onward. 

A.  J.  Edgerton  [Minnesota  Railroad  Commissioner],  Compilation 
of  the  Railroad  Laws  of  Minnesota;   St.  Paul,  1872. 

Original  Records  in  the  Office  of  the  Secretary  of  State  of  Min- 
nesota, in  St.  Paul. 

Minnesota:  Its  Place  among  the  States;  being  the  First  Annual 
Report  of  the  Commissioner  of  Statistics,  for  the  Year  ending  January 
1st,  1860.     Hartford,  Conn.  1860. 

Second  Annual  Report  of  the  [Minnesota]  Commissioner  of  Sta- 
tistics, for  the  years  1860  and  1861.     St.  Paul,  1862. 

Legislative  Manuals  of  the  State  of  Minnesota. 


♦  Two  constitutional  conventions  convened  independently  of  each 
other  in  St.  Paul;  for  both  Democrat.s  and  Republicans  claimed  victory 
at  the  polls.  Neither  convention  recognized  the  other,  but  unofficially 
they  compared  work  as  they  proceeded  and  finally  ag'reed  upon  the  same 
constitution,  word  for  word.  The  constitution  was  accepted  almost 
unanimously  by  the  people.  The  enrolled  copy  of  the  Democrats  was 
sent  to  Washington.  The  other  is  preserved  in  the  Library  of  the  Min- 
nesota Historical  Society  in  the  capitol  at  St.  Paul.  See  Neill's  History 
of  Minnesota,  1858,  pp.  627-8. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  185 

Opinions  of  the  Attorneys  General  of  the  State  of  Minnesota, 
185S-18S4;  St.  Paul,  1884. 

Session  Laws  and  Revised  Statutes  of  the  following  states: 
Maine,  New  Hampshire,  Vermont,  Massachusetts,  Rhode  Island,  Con- 
necticut, New  York,  New  Jersey,  Pennsylvania,  Delaware,  Maryland, 
Virginia,  North  Carolina,  Georgia,  Kentucky,  Ohio,  Indiana,  Illinois, 
Michigan,  Wisconsin,  Iowa,  Missouri,  Kansas,  Nebraska,  and  Oregon. 
(In  tracing  the  origin  of  the  Minnesota  territorial  railroad  charters, 
special  attention  was  given  to  the  turnpike,  canal,  plank  road,  and 
early  railroad  charters  of  these  states.     See  Chapter  II.) 

State   Constitutions   and  the   Federal   Constitution. 

State  Court  Reports  of  Minnesota,  Michigan,  Illinois,  and  Penn- 
sylvania, cited  in  this  work. 

The  following  are  important  Minnesota  Supreme  Court  cases  deal- 
ing with  the  railroad  gross  income  tax  and  railroad  land  grants: 

Railway  Co.  v.  Parcher,  14  Minn.,  297. 

Minnesota  v.  Railway  Co.,  21  Minn.,  315;   472. 

Railway  Co.  v.  St.  Paul,  21  Minn.,  526. 

Ramsey  County  v.  Railway  Co.,  33  Minn.,  537. 

Todd  County  v.  Railway  Co.,  38  Minn.,  163. 

St.  Paul  v.  Railway  Co.,  39  Minn.,  112. 

State  v.  Luther,  56  Minn.,  156. 

Minnesota  v.  Fred.  Stearns,  72  Minn.,  200. 

(Reversed  Stearns  v.  Minn.,  179  U.  S.,  223.) 

United  States  Supreme  Court  Reports. 

United  States  Statutes  at  Large. 

The  following  is  a  list  of  United  States  Statutes  concerning  land 
grants  to  Minnesota: 

Act  of  June  29,  1854,  10  U.  S.  Statutes,  302,  Land  grant. 

Act  of  Aug.  4,  1854,  10  U.  S.  Statutes,  575,  above  grant  repealed. 

Act  of  March  3,  1857,  11  U.  S.  Statutes,  195,  Land  grant. 

Act  of  March  12,  1860,  12  U.  S.  Statutes,  3,  Swamp  lands  granted. 

Act  of  July  12,  1862,  12  U.  S.  Statutes,  624,  Route  changed  and 
land  grant. 

Act  of  May  5,  1864,  13  U.  S.  Statutes,  64,  Land  grant. 

Act  of  May  12,  1864,  13  U.  S.  Statutes,  72,  Land  grant. 

Act  of  July  2,  1864,  13  U.  S.  Statutes,  365,  Northern  Pacific  grant. 

Act  of  March  3,  1865,  13  U.  S.  Statutes,  526,  Grant  of  1S57  in- 
creased. 

Act  of  July  4,  1866,  14  LT.  S.  Statutes,  87,  Land  grant. 

Act  of  July  13,  1866,  14  U.  S.  Statutes,  93,  makes  up  probable  defi- 
ciencies. 

Act  of  July  13,  1866,  14  U.  S.  Statutes,  97,  relating  to  choice  of 
lands. 


186  MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 

t 

Public    Lands:      Local  and   Temporary   Laws.     Revised    Edition, 

18S2.     Governnaent  Printing  Office,  1883. 

Senate  Reports. 

House  of  Representatives  Reports. 

Congressional  Globe. 

Annual  Reports  of  the  Commissioner  of  Patents  (on  Agriculture), 
1837-1861,  incl. 

Annual  Reports  of  the  Commissioner  of  Agriculture,  1862-1888,  incl. 

Department  of  Agriculture;   Special  Report,  No.  2,  1883. 

List  of  Agricultural  and  Pomological  Societies,  Farmers'  Clubs, 
etc.,  on  the  books  of  the  Department  of  Agriculture,  July  1,  1870.  (47 
pages.)     Washington,  1870. 

Tenth  Census  of  the  United  States;  Report,  Volume  VII. 

Eleventh  Census  of  the  United  States;  Report  on  Wealth,  Debt, 
and  Taxation. 

Adams,  Charles  Fbaxcis,  Jr.  Railroads,  their  Origin  and  prob- 
lems; Revised  Edition,  New  York,  1878.  The  Granger  Movement;  120 
N  A.  Review,  394.  ^ 

An  Address  of  the  Anti-Monopoly  Party  of  Minnesota  to  their 
Constituents.  A  Review  of  the  Legislation  of  1874.  (Prepared  by  a 
committee,  Ignatius  Donnelly,  chairman.)     St.  Paul,  1874. 

CooLEY,  T.  M.  A  Treatise  on  the  Constitutional  Limitations  which 
rest  upon  the  Legislative  Power  of  the  States  of  the  American  Union. 
First  edition,  Boston,  1868;   third  edition,  Boston,  1873. 

Crawford,  J.  B.  The  Credit  Mobilier  of  America,  its  Origin  and 
its  History.     Boston,  1880. 

Darrow,  J.  W.  Origin  and  Early  History  of  the  Order  of  Patrons 
of  Husbandry.  Chatham,  N,  Y.,  1904.  (This  pamphlet  is  based  on  O. 
H.  Kelley's  book  on  this  subject.) 

Donaldson,  Thomas.  The  Public  Domain,  its  History  and  Sta- 
tistics.    Government  Printing  Office,  1884. 

Donnelly,  Ignatius.  Facts  for  the  Grangers.  (A  pamphlet  of  21 
pages.)     St.  Paul,  1873. 

FoLWELL,  WiLLL\M  Wa'tts.  Minnesota,  the  North  Star  State.  In 
American  Commonwealths  series:     Boston  and  New  York,  190S. 

Garfield,  James  A.  The  Future  of  the  Republic:  Its  Dangers  and 
its  Hopes.  (An  address  delivered  in  1873.)  Reported  in  Legal  Ga- 
zette, Philadelphia,  Dec.  19,  1873. 

Goodwin,  T.  S.  [Nom  de  plume,  Gracchus  Amebicanus.]  The 
Grange,  a  Study  in  the  Science  of  Society.    G.  P.  Putnam's  Sons,  1874. 

Gordon,  J.  H.  Illinois  Railway  legislation  and  Commission  Con- 
trol since  1870.     Illinois  University  Studies,  vol.  I. 


RAILROAD  LEGISLATION  IN  MINNESOTA.  187 

Kelley,  Ouveh  H.  Origin  and  Progress  of  the  Order  of  Patrons 
of  Husbandry  in  the  United  States;  A  History  from  1866  to  1873. 
Philadelphia,  1875. 

Kent,  James.  Commentaries  on  American  Law.  4  volumes;  New 
York,  1826. 

Larrabee,   William.     The   Railroad   Question.     Chicago,   1893. 

McKee,  T.  H.  The  National  Conventions  and  Platforms  of  All 
Political  Parties,  1789-1900.     Third  edition,  Baltimore,  1900. 

Martix,  E.  W.  History  of  the  Grange  Movement,  or  The  Farmers' 
War  against  Monopolies.     Philadelphia,  1873. 

Meyer,  Balthasar  H.  A  History  of  Early  Railroad  Legislation  in 
Wisconsin.  Wis.  Historical  Society  Collections,  vol.  XIV,  pages  206- 
300;  Madison,  Wis.,  1898. 

Million,  John  W.    Aid  to  Railways  in  Missouri.     Chicago,  1896. 

Neill,  Edward  D.  The  History  of  Minnesota  from  the  Earliest 
French  Exploration  to  the  Present  Time  [1858].  J.  B.  Lippincott  and 
Co.,  Philadelphia,  1858. 

Paine,  A,  E.  The  Granger  Movement  in  Illinois.  Illinois  Univer- 
sity Studies,  vol.  I. 

Parker,  N.  H.     The  Minnesota  Handbook  for  1856-7.     Boston,  1857. 

Periam,  Jonathan.  A  History  of  the  Origin,  Aims  and  Progress  of 
the  Farmers'  Movement.     Chicago,  1874. 

Poor,  Henry  V.  Manual  of  the  Railroads  of  the  United  States. 
New  York,  1868,  and  onward. 

Prospectus  of  the  Southern  Minnesota  Railroad  Company,  1865; 
Ibid.,  1869. 

Redfield,  I.  F.  The  Law  of  Carriers  of  Goods  and  Passengers, 
Private  and  Public,  Inland  and  Foreign,  by  Railway,  Steamboat,  and 
Other  Modes  of  Transportation.     Cambridge,  Mass.,  1869. 

Richardson,  James  D.  A  Compilation  of  the  Messages  and  Papers 
of  the  Presidents,  1789-1897.  Ten  volumes,  Government  Printing 
Office,  Washington,  1896-99. 

Sanborn,  J.  B.  Congressional  Grants  of  Land  in  Aid  of  Railways. 
Madison,  Wis.,  1899. 

Scott,  W.  A.  Repudiation  of  State  Debts.  New  York  and  Boston, 
1893. 

Smalley,  E.  V.  The  History  of  the  Republican  Party  from  its 
Organization  to  the  Present  Time,  to  which  is  added  a  Political  His- 
tory of  Minnesota  from  a  Republican  Point  of  View.     St.  Paul,  1896. 

Smith,  Stephe.  Grains  for  Grangers,  Discussing  all  Points  bearing 
upon  the  Farmers'  Movement  for  the  Emancipation  of  White  Slaves 
from  the  Slave  Power  of  Monopoly.  Union  Pub.  Co.,  Chicago,  Cincin- 
nati, San  Francisco,  1873. 


188 


MINNESOTA   HISTORICAL   SOCIETY    COLLECTIONS. 


Stukney,   a.    B.     The   Railway   Problem,   with   Many   Illustrative 
Diagrams.     St.  Paul,  1S91. 

Thiuune  Al.m.\.\.\c  and  Political  Register.     New  York. 
World  Al.ma.nac.     New  York. 

The  following  ^liunesota  nowsi)apers  have  been  quoted  or 
directly  referred  to  in  this  work : 


Anti-Monopolist,   St.   Paul. 
Duluth  Minnesotian. 
Duluth  Weekly  Tribune. 
Farmers'  Union,  Minneapolis. 
Federal  Union,  Rochester. 
Grange  Advance,  Red  Wing  and 

St.  Paul. 
Hastings  Gazette. 
Minnesota  Record,  Rochester. 
Minneapolis  Daily  Tribune. 
Monticello  Times. 
Owatonna  Journal. 
Owatonna  Press. 
Record  and  Union,  Rochester. 
Red  Wing  Argus. 
Rochester  Post. 


Sauk  Rapids  Sentinel. 

St.  Charles  Herald. 

St.  Cloud  Journal. 

St.  Cloud  Press. 

St.  Paul  Daily   Dispatch. 

St.  Paul  Evening  Journal. 

St.  Paul  Daily   Pioneer. 

St.  Paul  Weekly   Pioneer. 

St.  Paul  Weekly  Pioneer  Press. 

St.  Peter  Tribune. 

Stillwater  Messenger. 

Wabasha  Weekly  Herald. 

Wells  Atlas  (Faribault  County). 

Windom  Reporter. 

Winona  Republican. 


The  following  out-of-state  newspapers  and  periodicals  have 
been  quoted  or  referred  to : 


American   Law   Review,   Boston. 

Cultivator  and  Country  Gentle- 
man, Albany,  N.  Y. 

Harper's  Weekly,  New  York. 

Legal  Gazette,  Philadelphia. 

Monthly  Journal  of  Agriculture; 
New  York.  1846-48. 


Nation,  New  York. 

New  York  Daily  Tribune. 

North    American    Review,    New 

York   (Boston  till  1877). 
Railroad  Gazette,  New  York. 


r.\l\  l';i;si'l'\    of   CALIFORNIA  LIBRARY 


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